tag:blogger.com,1999:blog-15517294.post3381989429327714914..comments2019-10-16T02:23:02.106-05:00Comments on RUBIN ON TAX: DISCRETIONARY TRUST INTEREST HAS A GIFT TAX VALUE, BUT WHAT IS IT?Charles (Chuck) Rubinhttp://www.blogger.com/profile/07227879267908481649noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-15517294.post-8836658026662970702011-07-17T16:01:08.121-05:002011-07-17T16:01:08.121-05:00Well, if the lifetime beneficiary does not have a ...Well, if the lifetime beneficiary does not have a mandatory income interest, but only will receive what the trustee distributes in its discretion, his/her interest will be worth less than the 60% indicated in the tables (which assume an income interest). If the lifetime beneficiary can also receive principal either on a standard or in the trustee's discretion, this would seem to make his interest more valuable. How to come up with a value in these circumstances is the heart of the problem.Charles Rubinhttps://www.blogger.com/profile/07227879267908481649noreply@blogger.comtag:blogger.com,1999:blog-15517294.post-26990188506972867242011-07-15T14:06:10.744-05:002011-07-15T14:06:10.744-05:00Interesting. I would think the actuarial tables mi...Interesting. I would think the actuarial tables might come in to play here, but it seems a bit mind boggling. The remainder person already has a future interest in the property, so the transfer to the remainder person is not a 100% gift (assuming the grantor is deceased, and this trust is no longer revocable). If, for example, the beneficiary-life tenant is 70 years old at the time the gift is made, one actuarial table indicates life interest at age 70 is 60% (rounded off for simplicity). The remainder person's share is 40%. It it would seem that a gift of the property would convey to him (her) new value of only 60%. So, upon dist of $100K, taxable gift is $60K. <br /><br />But, I can see a possible argument (which I believe is the result of over-thinking) that since the remainder person's enjoyment is being advanced, his value received today is greater than his future interest. <br /><br />I am working on a very similar enterprise at this moment - your thoughts would be appreciated.Anonymousnoreply@blogger.com