Taxation - Trust Funds

Instructions

Suppose you are a CPA, and your client has requested advice regarding establishing an irrevocable trust for his two (2) grandchildren. He wants the income from the trust paid to the children for 20 years and the principal distributed to the children at the end of twenty (20) years.Use the Internet to research the rules regarding irrevocable trusts, gift tax, and estate tax. Be sure to use the six (6) step tax research process in Chapter 1 and demonstrated in Appendix A of your textbook as a guide for your written response.Write a one to two (1-2) page letter in which you:1. Analyze the effect of an irrevocable trust on the gift tax and future estate taxes.2. Suggest other significant alternatives that the client could use both to reduce estate tax and to maximize potential advantages of the payment of gift taxes on transfers of property.3. Use the six (6) step tax research process, located in Chapter 1 and demonstrated in Appendix A of the textbook to record your research for communications to the client.1. Determine the facts2. Identify the issues3. Locate applicable authorities4. Evaluate authorities5. Analyze the facts in terms of applicable authorities6. Communicate conclusions and recommendations to others

Answer

Taxation - Trust FundsNameAddressLocationName of clientAddress of clientFriday, August 23, 2019.Dear Sir, RE: ADVICE ON THE ESTABLISHMENT OF AN IRREVOCABLE TRUSTRegarding the issue of establishing an irrevocable trust, I will detail impacts on future estates and gift tax, provide a suggestion of alternatives to reduce tax and maximise advantages, and detail research on client communication. Foremost, it is essential to note that an irrevocable trust means that there is no provision for termination or modification without the consent of the beneficiary. In this case, once you transfer assets to the trust, only your grandchildren can alter the terms. With that in mind, the irrevocable trust established in your name will have direct impacts on gift tax since all transfers will be subject to t...
To avoid plagiarism, part of the answer is hidden. Click on the button below to order the full answer.
Order Answer Back
Price Calculator
Manage orders
Why we are Ranked the best
  • Unlimited Revisions
  • Free 24/7 Support and chat
  • Money back guaranteed
  • Low prices with discounts
  • Experienced writers.
  • Free Unlimited support

Hear from our customers

Get a quote Chat with support Find an expert Frequently asked questions