Treasury Considering Guidance on Material Participation for Estates, Trusts

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The Treasury Department is considering a guidance project on material participation for trusts and estates under tax code Section 469, a Treasury official told attorneys at the midyear meeting of the American Bar Association Section of Taxation in Phoenix.
It was the first confirmation from Treasury that policy makers may be taking up the project, although Internal Revenue Service officials have hinted for weeks that this would be the case.
Practitioners had hoped the department would tackle material participation for trusts and estates in its recently released guidance (T.D. 9644) on the new net investment income tax (249 DTR J-1, 12/30/13), but Treasury Estate and Gift Tax Attorney-Adviser Cathy Hughes said Jan. 24 that it was decided the issue would fit better under the passive activity loss rules of Section 469.

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