PLR 201928005: Tax Consequences of Charitable Lead Annuity Trust (CLAT) Termination

In PLR 201928005 the IRS ruled on tax consequences of the termination of a CLAT. Here, a decedent’s estate was transferred from a charitable lead annuity trust (CLAT) to a charitable foundation after decedent’s death pursuant to decedent’s will. The CLAT paid annual annuity payments to the foundation. The CLAT requested a state court order terminating the interests of the trustee and transferring all of the CLAT’s to the foundation.

The RIS ruled that the proposed distribution of the CLAT’s remaining assets to the foundation pursuant to the State Court order was not a distribution in satisfaction of a right to receive a distribution of a specific dollar amount or in specific property other than that distributed, nor was it a distribution in satisfaction of a general claim for an ascertainable value, and therefore no gain or loss would be recognized by the trust as a result of such distribution.

Click here to see full PLR 201928005.

Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal..

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