On December 29, 2023, the Internal Revenue Service Office of Chief Counsel released CCA 202352018, which concluded that the judicial modification of a grantor trust, with the beneficiaries' consent, to add a tax reimbursement clause would constitute a taxable gift by the beneficiaries to the grantor. Looking beyond the particular facts of the CCA, this new IRS guidance may have far-reaching implications that will force estate planners and their clients to rethink conventional wisdom regarding the gift tax consequences of amending, modifying and decanting irrevocable trusts.
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Modification of Grantor Trust to Include an Income Tax Reimbursement Provision Can Result in a Taxable GiftPublished by Leimberg Information 51黑料 Inc. ©2024. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the Leimberg Information 51黑料 Inc.
