Intentionally Defective Grantor Trusts: Asset Transfer Planning Strategies and Form 1041 Reporting Compliance

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Wednesday, July 13, 2022

Recorded event now available

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Course Materials

This course will provide tax professionals, including accountants and attorneys, with a detailed review of the advantages and applications of intentionally defective grantor trusts (IDGTs), tax planning approaches that utilize IDGTs, and related tax compliance.

Description

Taxpayers and advisers create IDGTs pursuant to IRC Sections 671-678 to freeze values for estate tax purposes while transferring assets from the estate free of gift tax. Like other properly structured and administered irrevocable trusts, IDGTs might protect the trust assets from claims by creditors and former spouses.

Set up correctly and based on current law, gifts or sales to these trusts can tax-efficiently pass net worth to future generations. However, trust powers must be carefully selected and understood to avoid an incomplete gift and unintentional inclusion of income in the grantor's estate.

While IDGTs offer significant tax benefits, estate planning tax advisers and counsel must be aware of potential pitfalls associated with IDGTs. These pitfalls include potential recognition of deferred gains in the case of early death and legislative uncertainty related to IDGT planning techniques.

Listen as our authoritative panel of estate planning tax advisers and counsel discusses best practices for maximizing the benefits of IDGTs and overcoming compliance challenges on Form 1041.

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Outline

  1. IDGT advantages and applications
  2. Structuring transactions with IDGTs
  3. Tax reporting issues relating to IDGTs
  4. Potential international issues

Benefits

The panel will explore these and other relevant issues:

  • Tax planning approaches that utilize IDGTs
  • Reporting installment sales in conjunction with IDGTs
  • Completing Form 1041, U.S. Income Tax Return for Estates and Trusts
  • Understanding the potential impact of discussions in Washington on the use of IDGTs

Faculty

Lipoff, Lawrence
Lawrence M. Lipoff, CPA, TEP, CEBS
Director
CohnReznick

With more than 30 years of experience, Mr. Lipoff specializes in the delivery of domestic and international private...  |  Read More

Jackson, Donna
Donna J. Jackson
Attorney
Donna J. Jackson & Associates

Ms. Jackson's practice focuses on estate planning, trusts and estates, wills, and probate law. She is a member of...  |  Read More

Cohen-Kurzrock, Benjamin
Benjamin A. Cohen-Kurzrock, JD, CPA
Attorney
Gunderson Dettmer Stough Villeneuve Franklin & Hachigian

Mr. Cohen-Kurzrock is a corporate and securities associate in the San Diego office.

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