New IRS Guidance for Irrevocable Grantor Trusts: 1014 Basis Adjustments, Key Issues for U.S. and Non-U.S. Persons

A live 90-minute CLE/CPE video webinar with interactive Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford CPE+ Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Thursday, July 6, 2023

1:00pm-2:30pm EDT, 10:00am-11:30am PDT

or call 1-800-926-7926

This CLE/CPE webinar will discuss recent IRS guidance for basis adjustments for irrevocable grantor trusts and other basis issues encountered by trust and estate advisers. The panel will discuss options and key provisions in structuring trusts, Revenue Ruling 2023-2 and its impact on basis and estate and tax planning, determining and substantiating tax basis in light of recent IRS guidance, planning considerations for U.S. and Non-U.S. persons, and other basis conundrums encountered by estate and trust advisers.

Description

The significant increase in the federal estate tax exemption under current tax law emphasizes the need for estate planners to minimize income taxes for beneficiaries on assets passed through inheritances and trusts. Recently issued Revenue Ruling 2023-2 provides guidance for certain trusts for federal income tax purposes regarding the tax basis for assets passing from a decedent upon the owner's death and other key issues. Estate planners and advisers must have a complete understanding of these rules and their potential impact on estate and tax planning.

As fewer estates are subject to estate or gift tax, planners and fiduciary advisers must focus on managing tax basis to minimize the tax cost of transferring assets to beneficiaries. Section 1014 allows inheritors to step up the tax basis of assets, which may reduce capital gains taxes. The basis consistency rules allow the IRS to assess penalties under Section 6662 against the estate or beneficiary for basis reporting inconsistencies stemming from valuations aimed at eliminating income taxes. This accuracy-related penalty for the underpayment of tax resulting from a valuation misstatement can be costly for estates and beneficiaries.

Revenue Ruling 2023-2 has confirmed that the basis adjustment under section 1014 generally does not apply to assets of an irrevocable grantor trust not included in the decedent’s estate for federal estate tax purposes. However, estate planners and other advisors still have several tools for basis planning available to them for clients who will likely have taxable estates and those that likely will not.

Estate planners must ensure that any valuation of assets for purposing of achieving a step-up in basis adheres to the tax basis rules under current law and recently issued Revenue Ruling 2023-2. Estate planning advisers must also consider other options such as gift planning techniques, transfers of assets, and the use of trusts to obtain a step-up in basis and avoid the severe consequences of a misstep.

Listen as our panel discusses options and key provisions in structuring trusts, Revenue Ruling 2023-2 and its impact on basis and estate and tax planning, determining and substantiating tax basis in light of recent IRS guidance, planning considerations for U.S. and non-U.S. persons, and other basis conundrums encountered by estate and trust advisers.

READ MORE

Outline

  1. Revenue Ruling 2023-2
  2. Challenges for taxpayers with irrevocable trusts
  3. Key issues for non-U.S. persons
  4. Identifying low basis assets subject to potential income tax consequences
  5. Transfer strategies
  6. Post-mortem tools for achieving income tax basis step-up
  7. Potential tax risks of basis adjustment strategies

Benefits

The panel will review these and other important topics:

  • Key provisions and planning considerations in light of Revenue Ruling 2023-2
  • Impact on taxpayers with irrevocable trusts
  • Reevaluating income tax planning and alternative options for completed gift grantor trusts
  • Which class of assets benefit from basis adjustment transactions?
  • Using trust decanting and other post-mortem actions to achieve basis step-up
  • Structuring sale and exchange transactions between trusts to maximize tax basis
  • Tax and other risks involved in basis adjustment transactions and strategies

Faculty

Brownlow, Sarah
Sarah E. Brownlow

Partner
Virginia Estate & Trust Law

Ms. Brownlow guides individuals and families through the estate planning process and then assists them with...  |  Read More

Masselli, Scott
Scott W. Masselli

Attorney
Virginia Estate & Trust Law

Mr. Masselli focuses his practice on estate planning and estate and trust administration. He helps clients create...  |  Read More

Attend on July 6

See NASBA details.

Cannot Attend July 6?

You may pre-order a recording to listen at your convenience. Recordings are available 48 hours after the webinar. CPE credit is not available on recordings. Strafford will process CLE credit for one person on each recording. All formats include course handouts.

To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video

Download