Stepping up Basis in Living Taxpayer Assets with Upstream Wealth Transfers through Intentionally Defective Grantor Trusts

Authors

Michael J. Schaum

First Page

80

Document Type

Comment

Abstract

This paper will begin with a brief background discussion on the tax and estate planning principles underlying the legality of the wealth transfer including (A) the Taxable Gross Estate; (B) the Unified Tax Credit against the Estate and Gift Tax; (C) Basis and Adjustments; (D) Defective Grantor Trusts; and (E) Downstream Sale Combined with a Grantor Trust. The paper will then discuss the absence of guidance from the IRS on the legality of these trust structures and finally conclude that the IRS should allow wealth preservation through the transactions described herein because the current Code, properly construed, allows for it.

Recommended Citation

Michael J. Schaum, Stepping up Basis in Living Taxpayer Assets with Upstream Wealth Transfers through Intentionally Defective Grantor Trusts, 36 St. Thomas L. Rev. 80 (2023).
Available at: https://scholarship.stu.edu/stlr/vol36/iss1/5