Step up in basis for nonresident’s assets in irrevocable trust

What “basis” is One of the continuing mysteries of life involves the concept of “basis”. Think of basis as your acquisition cost. This is essential in calculating your capital gain tax after selling an asset. Capital gain is the difference between the sale price and your acquisition cost. The higher your basis — or acquisition […]

A rare reported U.S. case on trust protectors

Trust protectors are a rare breed in U.S. trusts. Our firm knows about using protectors because we do so much work with offshore (i.e., non-U.S.) trusts, where use of a protector is common. Case law from U.S. courts defining a protector’s rights and responsibilities are even rarer. The Missouri Court of Appeals has a recent […]

Foreign gift reporting on Form 3520 is next

Besides the FBAR (the Report of Foreign Bank and Financial Accounts, Form TD F 90-22.1, warning it is a PDF) the single most “oops I forgot” form that I see for regular human being clients is Form 3520. Gifts received from nonresidents aren’t reported properly. Or at all. Something tells me (warning! PDF) that the […]

Gifts of cash by nonresidents are surprisingly taxable

The United States has a gift tax: if you give something to someone, you have to pay the U.S. government for the privilege. Yes there are a ton of exceptions and weird rules. This is tax law after all. But you’d be surprised who gets tangled up in the gift tax law. Consider this one. […]

Exercise a limited power of appointment, make a gift

This is a little bit of inside baseball for the pointy-headed trust aficionados among you. We draft tons of trusts. Domestic trusts. Foreign trusts. Revocable and irrevocable. There is plenty of stuff in a trust that is non-obvious, both in the trust language and the tax implications of what you do after the trust is […]