Nice Booby Prize

, By Michael J. Jones

Some trusts subjected to estate taxes receive fresh income tax basis, maybe without any IRD to spoil it

By Michael J. Jones

The booby prize when property held in trust is included in a decedent's taxable estate is that the property receives a fresh income tax basis. So, there's estate tax on the property because it's in the estate. But at least the fresh basis wipes out all the income taxes on the property's appreciation during the decedent's lifetime.

Unfortunately, there's no fresh basis for the taxable income that the decedent had coming during his lifetime — but didn't receive before dying (called income in respect of a decedent or IRD, in the Internal Revenue Code.)¹

Sign in to
view the full article

Not a subscriber?

Subscribe & Save
Get immediate access to Trust & Estates online
Subscriber Benefits
Learn more about Trust & Estates magazine, online article access and our free enewsletters.

Wealth Watch E-Letter Subscribe

Fate of Famed Art Collection Unresolved

By David Thayne Leibell, partner in the Stamford, Conn. and New York City offices of Wiggin and Dana LLP

Tennessee Chancery Court temporarily blocks the sale by financially strapped college of a 50 percent interest to a Walmart heiress’ new museum...

The Shifting Sands of the Tax Burden

By John T. Brooks, partner, and Samantha E. Weissbluth, senior counsel, Foley & Lardner LLP, Chicago

A U.S. Court of Appeals ruling underscores the importance of paying attention to the tax implications of selling or transferring property before a testator’s death...

View Past Wealth Watch E-letters...