Unlimited Duration Trusts - Minnesota CLE
Unlimited Duration Trusts - Minnesota CLE
Unlimited Duration Trusts - Minnesota CLE
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• Larger Gift Tax Exemptions ($5MM)<br />
– Larger Gifts & Installment Sales<br />
– More Appraisal Risk<br />
Defined Value Transfers Regarding<br />
Promissory Note Sales –<br />
Protect Against Appraisal Risk:<br />
• Example:<br />
– $5MM: Gift to Dynasty Trust<br />
– $45MM: Promissory Note Sale with Discounted Asset<br />
– $50MM: IRS Determined Value of Discounted Asset<br />
– Problem?<br />
– Solution: Defined Value Transfer<br />
• Defined Value Transfer: Expresses transferred asset as dollar value [vs.] percentage<br />
interest [or] number of units<br />
– Wandry v. Commissioner, T.C. Memo, 2012-88, Mar. 26, 2012<br />
• Example: $X to Dynasty Trust as Promissory Note Sale<br />
[and]<br />
Balance to GRAT as a gift<br />
© South Dakota Trust Company, LLC – All Rights Reserved<br />
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