PLR deems judicial modifications of trust don’t impact generation-skipping tax exemption.
Private Letter Ruling 202108001 (released Feb. 26, 2021) addresses the intersection of the best of times – a grandfathered generation-skipping transfer (GST) tax-exempt trust funded generously enough to warrant the cost of a PLR application – and the worst of times, namely drafting careless enough to include a digit mid-word in the title of a trust article. And the hero of our PLR is, undoubtedly, the brave counsel who rode into the fray with the issue-spotting-telescope of a 1L confronting her first tort exam and diffused each of the potentially grandfathering-defying facts at play.
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Two recent private letter rulings highlight the need to carefully consider an organization’s stated purposes and the provision under Code Section 501(c) that best fits those purposes before applying for exempt status.
In Private Letter Ruling 202102013, the IRS denied exempt status under Code Section 501(c)(3) for an organization whose stated purposes were to promote recreation and preserve/restore historic cars. The organization’s articles of incorporation also included a clause that stated that notwithstanding any other provision, the organization would not carry on any other activities not permitted to be carried on by a corporation exempt under Code Section 501(c)(3). The IRS pointed out that the specific stated purposes of recreation and preserving/restoring historic cars was broader than the purposes specified in Code Section 501(c)(3), and that the notwithstanding clause included in the organizational doc
Various 501(c)(3) organizations may pursue charitable activities or operate to pursue altruistic purposes. However, what if such activities or purposes do not fall within the Internal.
The first part of this series summarised basic US gift and estate tax situs rules and how the gift and estate taxes are applied to individuals who are not US citizens and are not domiciled in the United States for transfer tax purposes (non-resident aliens) (for further details please see Estate and gift tax situs of assets – basic rules ). This article provides examples of certain specific assets that are often part of a non-resident alien s investment portfolio.
Stock of US corporations
Stock of any corporation incorporated in any state in the United States
(1) is considered to have a US situs for estate tax purposes. Thus, if a mutual fund is organised as a US corporation, it is situated in the United States even if it holds non-US stocks.