Leading Grantor Trust Experts Say 'Know the Income Tax Consequences when Changing the Status of a Trust!'

ARLINGTON, Va., April 13 /PRNewswire/ -- Join the nation's leading Grantor Trust experts as they discuss the use of installment sales to grantor trusts, installment sales to non-grantor trusts, and private annuity sales to grantor trusts. On April 27, Jonathan Blattmachr, Jerry Hesch, Mitchell Gans and Elliott Manning will deliver a new BNA Tax & Accounting webinar – Grantor Trust Liabilities: The Income Tax Consequences when Changing the Status of a Trust – identifying the income tax issues that arise when liabilities, including seller-provided financing are part of a transaction and the fundamental income tax principles used to resolve these issues.

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BNA senior tax analyst Harold Pskowski noted that "toggling the grantor status of a trust has become a common planning technique, despite the lack of IRS guidance on the collateral tax effects. Practitioners who intend to use this technique must be fully aware of the potentially adverse income tax consequences before building this option into their client planning."

Attendees will learn why a transaction treated as a sale for adequate consideration for gift and estate tax purposes is not a sale for the income tax, and the income tax consequences when the grantor trust sale becomes an income tax realization event, either while the grantor is alive or upon the grantor's death.

In 60-90 minutes attendees will get practical guidance on:

• Whether the termination of grantor trust status by reason of the grantor's death, where all of part of the installment note remains outstanding, requires the realization and recognition of gain.  And, in the unlikely event that gain is reported, identifying the person responsible for reporting that gain.
• Whether the conversion of a non-grantor trust to a grantor trust while the grantor is alive is treated as an income tax termination of the deferred payment obligation, resulting in gain recognition for the gain previously deferred under the installment method.
• Whether the grantor's lifetime transfer of an installment note issued by a grantor trust to a person who is not the grantor of the trust is treated as an income tax disposition that requires the reporting of gain.
• When grantor trust status terminates by reason of death, whether the trust's income tax basis in the asset purchased from the grantor of a grantor trust is (i) a carryover basis; (ii) a tax-free step-up in basis under Section 1014; (iii) a cost basis for an asset acquired by purchase; or (iv) something else.
• Whether there is there income in respect of a decedent when the grantor dies.
• The surprising income tax exposure if the grantor's liability to pay the income taxes on the grantor trust's income is toggled off while the grantor is living.

About the Speakers

Jonathan G. Blattmachr is a former partner at Milbank, Tweed, Hadley & McCloy LLP in New York. He is recognized as one of the most creative trust and estates lawyers in the country and has written and lectured extensively on estate and trust taxation and charitable giving. He has taught at both the Columbia University and NYU Law Schools, is a Fellow and former Regent of the American College of Trust and Estate Counsel, and is the author or co-author of four books and more than 100 articles on estate and trust topics.

Mitchell Gans is Professor of Law at the Hofstra University School of Law in Hempstead, New York.  He is a leading scholar in the estate and gift tax area, has written extensively on trust and estate taxation, and is a frequent lecturer for ALI-ABA, NYU, the American College of Trust and Estate Counsel, the ABA, and other groups.

Jerome M. Hesch is an estate planner and advisor who practices in Miami. He is an Adjunct Professor at the University of Miami's Graduate Programs in Estate Planning and Taxation, and has appeared in CLE programs throughout the country. He was previously with the Miami office of Greenberg Traurig P.A. and the IRS Office of Chief Counsel in Washington, D.C.

Elliott Manning is Professor of Law at the University of Miami School of Law, where he is Chair of the Graduate Program in Taxation.  He is a fellow of the American College of Tax Counsel and has written several book and numerous articles on federal income tax subjects. Before joining the School of Law, he was a partner with Cleary, Gottlieb, Steen & Hamilton in New York.

Grantor Trust Liabilities: The Income Tax Consequences when Changing the Status of a Trust takes place April 27, 2010, from 12:30 – 2:00 pm, ET). To register for this webinar and obtain further information about CLE and CPE credits, go to http://www.bnatax.com/grantor-trusts-liabilities-webinar/?open&cmpid=tmtxpr2010 or call 1-800-372-1033, menu Option 6, then Option 1. The fee is $249 for BNA subscribers, $299 for nonsubscribers. To receive automatic, email notification of upcoming BNA webinars that may be of interest to you, go to: http://www.bna.com/emailsignup.htm

About BNA Tax & Accounting Webinars

BNA Tax & Accounting is the foremost source of tax and accounting research, news, practice tools, and guidance for tax attorneys, CPAs, corporate tax managers, estate planners, and financial accountants.  Designed for today's busy practitioners, our webinars offer the same expertise and relevance that are the hallmark of all BNA Tax & Accounting resources. In just 60-90 minutes, practitioners gain in-depth knowledge on a current tax or accounting topic from experts in that area — and benefit from practical applications that can be put to work immediately. Conference attendees have the opportunity to ask the speakers questions, and may be eligible to earn CLE or CPE credits — all from the convenience of their own office or conference room.

SOURCE BNA Tax & Accounting