Apr 1, 2008 12:00 PM

By Amy P. Jetel

It's essential that practitioners know not only the fundamentals of U.S. federal income taxation of foreign non-grantor trusts and their beneficiaries, but also the ways to plan around the “throwback tax” that's imposed on distributions of accumulated income to the U.S. beneficiaries of these trusts. Of course, if you can't avoid the throwback tax, you're going to have to know how to calculate it. And advisors must be aware of the U.S. tax reporting requirements related to foreign non-grantor trusts.

If a trust is classified as a non-grantor trust, it's a separate taxpayer that falls under the taxation regime of Subchapter J of the Internal Revenue Code. (These rules contrast to those applicable to a “grantor trust,” which is essentially ignored for income-tax purposes, because its income is taxed to the trust's grantor as the income is realized each year. See “Grantor vs. Non-Grantor Trust,” p. 54.)

Topics of Interest

Estate Tax	Donor Advised Funds
GSTs	Family Offices
Private Foundations	Life Insurance
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Topics of Interest

Estate Tax	Donor Advised Funds
GSTs	Family Offices
Private Foundations	Life Insurance
2010 Tax Act News	Industry Trends Surveys

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2011 Trust Glossary

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50 Years Ago This Month

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50 years ago, in May 1962, we featured articles such as: "Future of Canadian Trusteeship" by Arthur H. Mingay", "Training Trust Employees" by Ian M. Marr, "What is a Trust Officer?" by Eric J. Brown, and "Selling Services" by Donald I. Webb.

Conrad Teitell's Guide to Tax Benefits For Charitable Gifts

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