IRC 645 Election: Estate Planning for Qualified Revocable Trusts in Taxable Estates
Deferral Opportunities, Active Participation Rules and Separate Share Rule Considerations
Recording of a 90-minute CLE/CPE webinar with Q&A
This CLE/CPE course will provide estate planning counsel and advisers with a comprehensive guide to the tax planning opportunities and hazards with making a Section 645 election to treat qualified revocable trusts (QRTs) as estates. The panel will discuss the advantages of electing estate treatment of existing revocable trusts, describe the impact of the “separate share rule” of IRC 663 in calculating distributable net income (DNI), and detail tax allocation strategies.
Outline
- Qualified revocable trusts eligible for a Section 645 election
- Advantages of a Section 645 election
- Ability to select a fiscal year for the estate
- Waiver of active participation requirements
- Allows for longer S corporation stock holding period
- Mechanics of making the election
- Income tax impact of “separate share” rule after a Section 645 election
- Non-tax reasons to make, or not make, Section 645 election for a QRT
- Illustrations
Benefits
The panel will review these and other key issues:
- Types of trusts that qualify as QRTs eligible to make a Section 645 election
- Applying the “separate share” rule to DNI calculations and allocations between the QRT and the estate after the election
- Post-mortem tax planning strategies present with a Section 645 election
- Mechanics of making the election with initial income tax filing
Faculty
Priya P Royal, Esq. LL.M.
Managing Attorney
Royal Law Firm
Ms. Royal practices in the areas of tax, trusts & estates, and business law, representing clients in diverse areas... | Read More
Ms. Royal practices in the areas of tax, trusts & estates, and business law, representing clients in diverse areas of the law, including trusts and estates. She previously served as an attorney in the Estate and Gift Tax division of the Internal Revenue Service, where, she examined estate and gift tax returns, challenged asset valuations, and made tax assessments. She worked on several special projects including developing course materials for incoming IRS attorneys, working on a complex team audit of a prominent estate worth over $100 million, and supervising a group of estate tax attorneys. She was instrumental in a project to develop a better understanding of the implications of income tax law in estate and gift tax.
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John E. Dawson
Member
Dickinson Wright
Mr. Dawson's practice focuses primarily in the areas of trusts, estates, and asset protection. He has extensive... | Read More
Mr. Dawson's practice focuses primarily in the areas of trusts, estates, and asset protection. He has extensive practice experience in estate planning, wills, offshore trusts and revocable living trusts, probate, guardianships, business succession planning, asset protection planning, estate and gift taxation, and all related corporate law in support of entity formation, including corporations, family limited partnerships, and limited liability companies. He is co-author of Asset Protection Guidebook for Attorneys and Accountants, and has taught various Continuing Legal Education courses on probate, estate taxation, asset protection and related topics.
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Christiana M. Lazo
Counsel
Ropes & Gray
Ms. Lazo’s practice consists of representing ultra-high net worth individuals, their family offices, and closely... | Read More
Ms. Lazo’s practice consists of representing ultra-high net worth individuals, their family offices, and closely held businesses in developing and implementing sophisticated domestic and international tax and estate plans. She has significant experience counseling global clients on inbound and outbound planning, particularly advising families with members in multiple jurisdictions on wealth transfers and on tax-efficient investment and business ownership structures.
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