In each of the following independent cases, write a memo for the tax research file in preparation

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In each of the following independent cases, write a memo for the tax research file in preparation for a meeting with Marques. In each memo, explain whether the proposed plan meets his objective of shifting income and avoiding the grantor trust rules.

a. Marques transfers property in trust, income payable to Winnie (his wife) for life, remainder to his grandson. Marques’s son is designated as the trustee.

b. Marques transfers income-producing assets and a life insurance policy to a trust, life estate to his children, remainder to his grandchildren. The policy is on wife Winnie’s life, and the trustee (an independent trust company) is instructed to pay the premiums with income from the income-producing assets. The trust is designated as the beneficiary of the policy.

c. Marques transfers property in trust, income payable to Winnie (Marques’s ex-wife), remainder to Marques or his estate upon Winnie’s death. The transfer was made in accord with the couple’s divorce agreement. An independent trust company is designated as the trustee.

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South-Western Federal Taxation 2022 Corporations, Partnerships, Estates And Trusts

ISBN: 9780357519240

45th Edition

Authors: William A. Raabe, James C. Young, Annette Nellen, William H. Hoffman

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