IRS Proposes Basis Rules For Tax-Exempt Trust Interests

Law360, New York (January 16, 2014, 1:53 PM EST) -- The Internal Revenue Service released proposed regulations Thursday detailing how beneficiaries of charitable remainder trusts who sell assets in the trust should treat the resulting tax-exempt income if it is reinvested in new assets.

Charitable remainder trusts — trusts that pay out to beneficiaries for a specific term and give the remainder to charity — aren't subject to income tax, meaning that if a CRT sells its assets it gets a tax-exempt gain and can reinvest the sale income in new assets. Generally the basis, or...
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