Description

The IRS recently issued Revenue Ruling 2023-2 providing guidance for basis adjustments for irrevocable grantor trusts. Estate planners must understand the nuances of basis adjustment rules and key provisions stemming from recent guidance to minimize income taxes for beneficiaries on assets passed through inheritances and trusts.

As fewer estates are subject to estate or gift tax, planners and fiduciary advisers must focus on managing tax basis to minimize the tax cost of transferring assets to beneficiaries. Basis adjustment techniques include sales and exchanges to and between trusts, structuring powers of appointment to ensure tax-efficient distribution strategies, and giving trustees broad powers of distribution to ensure that lower basis assets are passed out of the trust.

For irrevocable or completed gift grantor trusts, and in light of recent IRS guidance, taxpayers must reevaluate their income tax planning and consider alternative options if the basis adjustment is inapplicable.

Listen as Wendy Holloway, CPA, MAFM, Senior Manager at Barnes, Dennig & Co., provides a practical guide to executing an estate asset basis adjustment strategy to minimize income tax in a wealth transfer plan in light of Revenue Ruling 2023-2.

Outline

1. IRS Revenue Ruling 2023-2
2. Identifying low basis assets subject to potential income tax consequences
3. Transferring low basis/appreciated assets in light of recent IRS guidance
4. Potential tax risks of basis adjustment strategies

Benefits

The panelist will discuss these and other key issues:

• Which class of assets benefit from basis adjustment transactions?
• What is the impact of Revenue Ruling 2023-2 and next steps for estate planners and taxpayers?
• Structuring sale and exchange transactions between grantor and non-grantor trusts to maximize tax advantages through basis management
• Tax and other risks involved in basis adjustment transactions and strategies