[WSBAPT] IRC Definition of "Income"

[Robert G. Condie]

Take a look at IRC §643(b).

> On Feb 23, 2018, at 15:57, David Faber <david at faberfeinson.com> wrote:
> 
> I probably should have provided more:
> 
> My clients are currently receiving assets from an irrevocable trust to cover certain limited living expenses at the discretion of one client's sister. The clients are trying to make the argument that the senior property tax exemption should apply to them, because they believe themselves to be earning less than $40k a year in "disposable income" and they otherwise qualify for the exemption. RCW 84.39.010(6)(b) provides that "disposable income" shall have the meaning under RCW 84.36.383, subsection (5) of which provides that "disposable income" has the meaning prescribed in the IRC of "adjusted gross income" plus the other conditions described therein, all of which are immaterial to my clients. IRC 62, meanwhile, provides that the adjusted gross income shall be defined as "gross income" under IRC 61 minus certain deductions, all of which are immaterial here. Finally, IRC 61 defines "gross income" to include, under subsection (15) "income from an interest in an estate or trust."
> 
> This appears to be a dead-end, however, because the IRC does not provide what "income" means in the context of subsection (15). Is any distribution from a trust classified as "income" from an interest in an estate or trust, or is it constrained to such distributions which would normally qualify as "income" in the way that we would draft, say, a conduit trust, and therefore not include distributions of principal?
> 
> Best,
> David J. Faber
> Faber Feinson PLLC
> 210 Polk Street, Suite 1
> Port Townsend, WA 98368
> (360) 379-4110
> 
> *** NOTICE: ATTORNEY CLIENT COMMUNICATION - PRIVILEGED & CONFIDENTIAL.  This communication may contain privileged or other confidential information. If you are not the intended recipient, or believe that you have received this communication in error, please do not print, copy, retransmit, disseminate, or otherwise use the information. Also, please indicate to the sender that you have received this communication in error, and destroy the copy you received.***
> 
> On Fri, Feb 23, 2018 at 2:00 PM, David Sweeney <D.Sweeney at smithzuccarini.com <mailto:D.Sweeney at smithzuccarini.com>> wrote:
> Possibly you would have to look at the Washington Principal and Income Act?
> 
>  
> 
> David B. Sweeney 
> Smith & Zuccarini, P.S. 
> 2155-112th Avenue NE 
> Bellevue, Washington 98004
> 
> Telephone:  425-453-4455 <tel:(425)%20453-4455> 
> Direct Line: 425-990-1586 <tel:(425)%20990-1586> 
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> E-mail:D.sweeney at smithzuccarini.com <> 
> www.smithzuccarini.com <http://www.smithzuccarini.com/>
> From: wsbapt-bounces at lists.wsbarppt.com <mailto:wsbapt-bounces at lists.wsbarppt.com> [mailto:wsbapt-bounces at lists.wsbarppt.com <mailto:wsbapt-bounces at lists.wsbarppt.com>] On Behalf Of David Faber
> Sent: Friday, February 23, 2018 1:41 PM
> To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com <mailto:wsbapt at lists.wsbarppt.com>>
> Subject: [WSBAPT] IRC Definition of "Income"
> 
>  
> 
> I'm trying to find a definition of the term "income" (not "gross income") under the IRC. The "gross income" definition in IRC 61(a)(15) states that "income from an estate or trust" but does not provide any guidance on what "income" means in that context. Can anyone tell me how "income" is defined independent of the term "gross"?
> 
> 
> 
> Best,
> 
> David J. Faber
> 
> Faber Feinson PLLC
> 
> 210 Polk Street, Suite 1
> 
> Port Townsend, WA 98368
> (360) 379-4110 <tel:(360)%20379-4110>
>  
> 
> *** NOTICE: ATTORNEY CLIENT COMMUNICATION - PRIVILEGED & CONFIDENTIAL.  This communication may contain privileged or other confidential information. If you are not the intended recipient, or believe that you have received this communication in error, please do not print, copy, retransmit, disseminate, or otherwise use the information. Also, please indicate to the sender that you have received this communication in error, and destroy the copy you received.***
> 
> 
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