Letter Ruling on Constructive Trust Add Omits Key Questions

7 Pages Posted: 21 Dec 2017

Date Written: November 6, 2017


In PLR 201735005, IRS ruled that an adjustment between a beneficiary and the trustee of an irrevocable trust would not be treated as a constructive addition, causing the trust to lose its "grandfathered" status as exempt from the generation-skipping transfer tax.

What is left unsaid raises more questions than the letter ruling itself answers. By taking at face value the taxpayer's representations, and by not inquiring into facts that might have affected the result, IRS is signaling it will make only cursory inquiry into a transaction in which there are opportunities for manipulation.

Keywords: letter ruling, generation-skipping transfer tax, constructive addition

Suggested Citation

Willis, Russ, Letter Ruling on Constructive Trust Add Omits Key Questions (November 6, 2017). Tax Notes, Vol. 157, No. 6, 2017. Available at SSRN: https://ssrn.com/abstract=3082563
No contact information is available for Russ Willis

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