Tag: Code Sec. 1411

Code Sec. 1411 Material Participation by Trusts— Part 2

~ lsaret

Lewis Saret authored the following column, published in CCH Taxes – The Tax Magazine, The Estate Planner: Code Sec. 1411 Material Participation by Trusts – Part 2.

This column, the second of a two-part column, concludes a series of interrelated columns dealing with the Code Sec. 1411, 3.8-percent net investment income tax (NIIT). It discusses material participation of trusts and estates, analyzing several factors that may be relevant to the determination of material participation by trusts and estates.

The full column may be downloaded by clicking the following link: Material Participation by Trusts Part 2.

Income Tax Alert: Tax Court Rules That Trust Qualifies For Passive Activity Exception

~ lsaret

On March 27, 2014, the U.S. Tax Court issued its decision for the case of Frank Aragona Trust et al. v. Commissioner, 142 T.C. No. 9, No. 15392-11 (2014). The Court held that the Frank Aragona Trust (“the Trust”) qualified for the Internal Revenue Code (“IRC”) Sec. 469(c)(7) passive activity exception. The Tax Court found that a trust is capable of performing personal services through its individual trustees and that the Trust materially participated in real property trades or business. It concluded that the Trust’s rental activities were consequently not passive.

In light of the recent imposition of the 3.8 % Net Investment Income Tax (NIIT), this ruling is especially important because any income derived from trade or activities in which a trust or estate materially participates would not be subject the NIIT. Continue reading “Income Tax Alert: Tax Court Rules That Trust Qualifies For Passive Activity Exception” →

Code Sec. 1411 Material Participation by Trusts & Estates (Part 1) – Current Status and Planning

~ lsaret

Lewis Saret authored the following column, published in CCH Taxes – The Tax Magazine, The Estate Planner: Code Sec. 1411 Material Participation by Trusts & Estates (Part 1) – Current Status and Plannning.

“This column, the first of a two-part column, concludes a series of interrelated columns dealing with the Code Sec. 1411, 3.8-percent net investment income tax (NIIT). This column deals with material participation of trusts and estates and recaps various planning suggestions that have been made to mitigate the NIIT.”

The full column may be downloaded by clicking the following link: Material Participation of Trusts & Estates Part 1 Continue reading “Code Sec. 1411 Material Participation by Trusts & Estates (Part 1) – Current Status and Planning” →