[WSBAPT] Non pro rata allocation of taxable income to beneficiaries

Fri Apr 3 09:19:37 PDT 2015

Eric- I did one of those custodian transfers to an inherited account thru
Fidelity and they were most knowledgeable and helpful (in contrast to the
grantor custodian!). It got us a 5 year stretch out and allowed us to close
the estate. Good luck!

Cyrus W. Field, Attorney at Law (admitted in Washington and Oregon)

phone: 360-472-1223 Mail: POB 367, Shaw Island, WA 98286 Office: 640 Mullis
St. Friday Harbor, WA

******************************************************************

The information contained in this e-mail message, including attachments, may
be privileged, confidential and protected from disclosure. If you are not
the intended recipient, any dissemination, distribution or copying is
strictly prohibited. If you think you have received this e-mail in error,
please e-mail the sender at cyfield at rockisland.com and destroy or delete the
original and any copies. 

From: wsbapt-bounces at lists.wsbarppt.com
[mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Eric Nelsen
Sent: Thursday, April 02, 2015 5:04 PM
To: WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] Non pro rata allocation of taxable income to
beneficiaries

Marcus--Thanks, I have never heard of this--I'm definitely glad to hear it.

In this case, though, the heirs are okay with getting the cash; we're just
trying to minimize the tax hit by selectively allocating the income
pass-through to low-income beneficiaries. Any thoughts on whether that's
allowed?

Sincerely,

Eric

Eric C. Nelsen

SAYRE LAW OFFICES, PLLC

1320 University St

Seattle WA  98101-2837

phone 206-625-0092

fax 206-625-9040

From: wsbapt-bounces at lists.wsbarppt.com
[mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Marcus Fry
Sent: Thursday, April 02, 2015 4:28 PM
To: 'WSBA Probate & Trust Listserv'
Subject: Re: [WSBAPT] Non pro rata allocation of taxable income to
beneficiaries

Eric:

I disagree about "no rollover options."  First, it's technically not a
rollover, as rollovers are only for spouses.  However, many financial
institutions permit the PR to instruct the establishment of inherited IRAs
in each beneficiary's name.  Natalie Choate's website list some good
companies. http://www.ataxplan.com/bulletinboard/ira_providers.cfm 

I suggest moving the IRA to another institution as suggested by Choate if
the one you are at will not cooperate.

Marcus J. Fry

Lyon, Weigand & Gustafson, P.S. 
Adoption Attorney*

P.O. Box 1689 
Yakima, Washington  98907 
Telephone:  (509) 248-7220 
Facsimile:  (509) 575-1883 

NOTICES:

 *Adoption Attorney reflects election as a Fellow of the American Academy of
Adoption Attorneys, an invitation based organization of 300+ attorneys
nationwide, under its criteria of experience, ethics and peer
recommendation. Washington's Supreme Court has not yet developed or
recognized a credentialing process for specialties, and
certification/fellowship is not required to practice law in this state.

Confidentiality: This e-mail transmission may contain information which is
protected by attorney-client, work product and/or other privileges.  If you
are not the intended recipient, you are hereby notified that any disclosure,
or taking of any action in reliance on the contents, is strictly prohibited.
If you have received this transmission in error, please contact us
immediately and return the e-mail to us by choosing Reply (or the
corresponding function on your e-mail system) and then deleting the e-mail.

From: wsbapt-bounces at lists.wsbarppt.com
[mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Eric Nelsen
Sent: Thursday, April 02, 2015 3:57 PM
To: WSBA Probate & Trust listserve (wsbapt at lists.wsbarppt.com)
Subject: [WSBAPT] Non pro rata allocation of taxable income to beneficiaries

Estate has four equal beneficiaries. Decedent had an IRA that paid directly
to Estate, so no rollover options.

One of the beneficiaries is in a very low tax bracket, and all four
beneficiaries agree that they'd like all the tax liability for the IRA
allocated to that one beneficiary. (There's enough other cash in the estate
to allow complete distribution of the IRA to one and make compensatory
distributions to the other three of untaxed inheritance dollars.)

Is that allowed? So the Estate would do a tax return and issue K-1s,
allocating all income liability to one out of the four beneficiaries, and
none to the other three?

Any idea where I would look for the governing rule? IRS Code or Regs I would
guess, but not sure where...

Sincerely,

Eric C. Nelsen

SAYRE LAW OFFICES, PLLC

1320 University St

Seattle WA  98101-2837

phone 206-625-0092

fax 206-625-9040

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/wsbapt/attachments/20150403/a83eb333/attachment.html>