Sep 1, 2008 12:00 PM, By John P.C. Duncan & Michael R. Conway, Jr.

By: By John P.C. Duncan & Michael R. Conway, Jr.

The logjam that for eight years has checked the pace of private trust company (PTC) creations will be dislodged when the Internal Revenue Service finalizes its proposed revenue ruling, perhaps as soon as the end of this year.¹ Once it's gone, expect a flood of PTC formations — propelled by pent-up demand among wealthy families who've waited for clarification of their federal tax implications.

Exactly how many new PTCs will be created depends on how successful the IRS proves to be in achieving the proposal's express goal. The tax consequences of using a PTC, said the IRS, should not be “more restrictive than the consequences that could have been achieved by a taxpayer directly [without the PTC], but without permitting a taxpayer to achieve tax consequences through the use of a [PTC] that could not have been achieved had the taxpayer acted directly.”

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