An IDIT is an irrevocable trust: it takes advantage of a disparity between the income and estate tax treatments offered certain trusts under IRC sections 674 and 675. Because an IDIT is deemed a grantor trust for income tax purposes, the trust grantor reports the trust's income annually. A...
An irrevocable trust usually ties up the assets until the grantor dies. It may be tempting for parents to put their assets into joint names with a child, but this can actually increase the taxes the child pays. When joint owner dies, the other owner already owns a portion of of the a...
You could also put assets in a trust—preferably anirrevocable trust. This effectively removes them from your estate and their classification as an inheritance upon your death. You can set up a schedule to distribute the funds when you establish the trust. Trusts are complicated and they must b...
charitable lead trusts, and charitable remainder trusts are some of the irrevocable trusts that are used for estate tax efficiency purposes. On the other hand, a revocable trust is not tax efficient because the trust can be revoked and, thus, assets held in it are still part of...
Irrevocable Trusts Anirrevocable trusttransfers control of an asset from the grantor to the beneficiary, protecting it from creditors and reducing the value of the grantor's total estate. While rules vary by state, irrevocable trusts typically cannot be amended, modified or terminated without the con...
The meaning of (INCOME) TAX RETURN is a report that a person sends to the government about the money that he or she has earned and the taxes that he or she has paid in one year.
Transfers to a revocable trust are not considered gifts, because the grantor can revoke the trust at any time, so the gift is not considered completed until it is distributed to a beneficiary; then the grantor may have to pay gift tax on that property. Gifts to an irrevocable trust are ...
Should You Do a Charitable Remainder Trust? This is a type of trust that provides you with a reliable stream of income for the rest of your life. It’s also an irrevocable trust, which means that once it’s established, it cannot be revoked. A charitable remainder trust (CRT) has certa...
You may consider certain charitable planning strategies that benefit from a higher interest rate environment, such as Charitable Remainder Annuity Trusts (CRATs). With a CRAT, you as the grantor would create and fund an irrevocable trust and receive an income tax charitable deduction for the year...
9. Establish a charitable trust Another tax-smart way to give is through acharitable remainder trust or a charitable lead trust. Both irrevocable trusts can be funded with a gift of cash or noncash assets. The difference between the two types is when you want your donation to go to charity...