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Income Tax Planning for Trusts-Impact of PLR 202118002

By Robert S. Barnett

Anticipated changes to the taxation of grantor trusts and the increased tax rates which are currently being discussed in Washington require that trustees and settlors should reevaluate the benefits and burdens of utiliz­ing annuities as a component of trust financial holdings.

 

Income tax planning for trusts (and estates) is becoming more prominent due to the recent tax law changes being discussed in Washington.
The pro­posed increase in tax rates will have an even more pronounced effect on the income taxation of trusts due to the condensed income tax brackets. For 2021, trusts will reach the maximum income…

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