Intentionally Defective Grantor
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TRAPS AND CONCERNS IN USING INTENTIONALLY …
dedononestateplanning.typepad.comis a grantor trust for income tax purposes, the INTENTIONALLY DEFECTIVE GRANTOR TRUSTS sale of the asset would not result in any taxable gain to the grantor (for income tax purposes, the grantor is considered to be selling an asset to him or herself). There also is no interest in come reported by the grantor or interest deduc tion to the IDGT.
Sales to Intentionally Defective Grantor Trusts (IDGT)
www.thewpi.orgA sale to an Intentionally Defective Grantor Trust (“IDGT”) is a sophisticated estate planning strategy that can provide substantial benefits to wealthy individuals and families seeking to transfer assets from one generation to the next (and to future generations) while minimizing income, estate and gift
Heckerling Update 2020 - BNY Mellon Wealth
www.bnymellonwealth.comIssues With Sale to and Intentionally Defective Grantor Trust: • Should sale transaction be disclosed on gift tax return. No requirement but gets 3 year statute of limitations running. • Death before note is paid off. Does death trigger income tax? Debate goes both ways. 2009 CCM says death is not an income tax recognition event.