Publications
U.S. Trust and Estate Planning 美國信託規劃實務（英文部分）
Chapter 3 U.S. Revocable Dynasty Trusts
Is there any way to reduce income taxes after an FGT converts to a U.S. irrevocable trust?
Form 8832 Election (step up basis)
Assets in the FGT ae includible in the grantor’s estate for U.S. estate tax purposes. Any capital gains held in the trust may be “stepped up” to fair market value through a “deemed liquidation” immediately prior to the grantor’s death by filing an entity classification election (Form 8832). This election may be activated retroactively, subject to certain limitations.
Note: For a detailed explanation of entity classification elections, please refer to the section of Chapter 4 that discusses the Form 8832
U.S. Tax Treatment for Foreign Estates
Under certain circumstances, assets held in a FGT may also be treated as being held by a foreign estate rather than a U.S. trust. When properly structured, this tax treatment may defer or alleviate U.S. income taxes for a period of time not exceeding two years. This could allow for the foreign estate to realize income without incurring U.S. income taxes.
Assets in the FGT ae includible in the grantor’s estate for U.S. estate tax purposes. Any capital gains held in the trust may be “stepped up” to fair market value through a “deemed liquidation” immediately prior to the grantor’s death by filing an entity classification election (Form 8832). This election may be activated retroactively, subject to certain limitations.
Note: For a detailed explanation of entity classification elections, please refer to the section of Chapter 4 that discusses the Form 8832
U.S. Tax Treatment for Foreign Estates
Under certain circumstances, assets held in a FGT may also be treated as being held by a foreign estate rather than a U.S. trust. When properly structured, this tax treatment may defer or alleviate U.S. income taxes for a period of time not exceeding two years. This could allow for the foreign estate to realize income without incurring U.S. income taxes.
