<html>
<head>
<meta content="text/html; charset=windows-1252"
http-equiv="Content-Type">
</head>
<body bgcolor="#FFFFFF" text="#000000">
<font face="Times New Roman, Times, serif">I found a 158-page
chapter on Grantor Trusts at
<a class="moz-txt-link-freetext" href="http://www.pli.edu/public/booksamples/10318_sample4.pdf">http://www.pli.edu/public/booksamples/10318_sample4.pdf</a>. The
following is copied (with footnotes are not in superscript font)
from page 4-13:<br>
<br>
in Moore v. Commissioner,54 a state court order set up a<br>
trust to hold the residue of a decedent’s estate and the residual<br>
beneficiaries of the estate consented to the creation of the
trust. The<br>
Tax Court ruled that each beneficiary was the grantor to the
extent<br>
of each beneficiary’s interest in the trust. Similarly, in Revenue<br>
Ruling 83-25,55 the Service ruled a minor was the grantor of a
trust<br>
that was created for the minor by a court order to hold a personal
injury<br>
award.56<br>
In Private Letter Ruling 200620025,57 a decedent’s disabled son
was<br>
one of four designated beneficiaries of the decedent’s IRA.
Because the<br>
disabled son was eligible for Medicaid, his guardian sought
permission<br>
of a local court to create a special needs trust for the son and
to transfer<br>
his interest in the IRA to the trust. The Service ruled that the
courtcreated<br>
special needs trust was a grantor trust of the decedent’s son<br>
under sections 671 and 677(a) and that the transfer of the IRA to
the<br>
trust was not a taxable disposition under section 691(a)(2).58 The<br>
Service ruled similarly in Private Letter Ruling 200826008, in
which<br>
an IRA beneficiary was a minor.59<br>
</font><br>
Doug Schafer, in Tacoma.<br>
<br>
<div class="moz-cite-prefix">On 9/20/2016 12:58 PM, John J. Sullivan
wrote:<br>
</div>
<blockquote
cite="mid:BF785773-F38D-4B2F-B308-F08B51233D93@comcast.net"
type="cite">
<meta http-equiv="content-type" content="text/html;
charset=windows-1252">
<div>If they are designed and operated as grantor trusts they are
disregarded entities like revocable trusts. Otherwise they are
taxed at compressed rates except distributions of DNI are
deducted. </div>
<div id="AppleMailSignature"><br>
</div>
<div id="AppleMailSignature">Are they actually grantor trusts of
court created for minors?</div>
<div id="AppleMailSignature"><br>
</div>
<div id="AppleMailSignature">John J. Sullivan. <br>
<br>
Sent from my iPhone</div>
<div><br>
On Sep 20, 2016, at 12:36 PM, Kate Szurek <<a
moz-do-not-send="true" href="mailto:kate@skagitlaw.com">kate@skagitlaw.com</a>>
wrote:<br>
<br>
</div>
<blockquote type="cite">
<div>
<meta http-equiv="Content-Type" content="text/html;
charset=windows-1252">
<meta name="Generator" content="Microsoft Word 12 (filtered
medium)">
<!--[if !mso]><style>v\:* {behavior:url(#default#VML);}
o\:* {behavior:url(#default#VML);}
w\:* {behavior:url(#default#VML);}
.shape {behavior:url(#default#VML);}
</style><![endif]-->
<style><!--
/* Font Definitions */
@font-face
{font-family:"Cambria Math";
panose-1:2 4 5 3 5 4 6 3 2 4;}
@font-face
{font-family:Calibri;
panose-1:2 15 5 2 2 2 4 3 2 4;}
@font-face
{font-family:Tahoma;
panose-1:2 11 6 4 3 5 4 4 2 4;}
@font-face
{font-family:"Cataneo BT";
panose-1:0 0 0 0 0 0 0 0 0 0;}
/* Style Definitions */
p.MsoNormal, li.MsoNormal, div.MsoNormal
{margin:0in;
margin-bottom:.0001pt;
font-size:11.0pt;
font-family:"Calibri","sans-serif";}
a:link, span.MsoHyperlink
{mso-style-priority:99;
color:blue;
text-decoration:underline;}
a:visited, span.MsoHyperlinkFollowed
{mso-style-priority:99;
color:purple;
text-decoration:underline;}
p.MsoAcetate, li.MsoAcetate, div.MsoAcetate
{mso-style-priority:99;
mso-style-link:"Balloon Text Char";
margin:0in;
margin-bottom:.0001pt;
font-size:8.0pt;
font-family:"Tahoma","sans-serif";}
span.EmailStyle17
{mso-style-type:personal-compose;
font-family:"Calibri","sans-serif";
color:windowtext;}
span.BalloonTextChar
{mso-style-name:"Balloon Text Char";
mso-style-priority:99;
mso-style-link:"Balloon Text";
font-family:"Tahoma","sans-serif";}
.MsoChpDefault
{mso-style-type:export-only;}
@page WordSection1
{size:8.5in 11.0in;
margin:1.0in 1.0in 1.0in 1.0in;}
div.WordSection1
{page:WordSection1;}
--></style><!--[if gte mso 9]><xml>
<o:shapedefaults v:ext="edit" spidmax="2050" />
</xml><![endif]--><!--[if gte mso 9]><xml>
<o:shapelayout v:ext="edit">
<o:idmap v:ext="edit" data="1" />
</o:shapelayout></xml><![endif]-->
<div class="WordSection1">
<p class="MsoNormal"><span style="font-size:12.0pt">If I
can, I’ll post this question to the tax section’s
listserv, but perhaps I can get help from this list . .
. which is nearly always so very helpful (and absolutely
always a tremendous resource)!<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">We
helped a number of families to create settlement trusts
for the minor beneficiaries of parents killed in a local
explosion (settlement of tort claims). My question
relates to taxation of the income generated by the
settlement trusts. The CPA for one of the trusts is
concerned that trust income must be taxed at the
compressed rates for trusts, and uses Form 1120-SF and
instructions to prove that point. One trust officer
says that, because the trusts are grantor trusts, the
income is taxed to the minor beneficiaries. I would
like a cite to the IRC or regs which resolves the
question.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">Any help
will be much appreciated!!<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">Kate<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman","serif";color:#1F497D"><image001.jpg><o:p></o:p></span></p>
<p class="MsoNormal"><b><i><span
style="font-size:13.5pt;font-family:"Cataneo
BT","serif";color:blue">Kate Szurek</span></i></b><span
style="font-size:12.0pt;font-family:"Times New
Roman","serif";color:black">, J.D., LL.M.<o:p></o:p></span></p>
<p class="MsoNormal"><a moz-do-not-send="true"
href="mailto:kate@skagitlaw.com"><span
style="font-size:12.0pt;font-family:"Times New
Roman","serif";color:blue">kate@skagitlaw.com</span></a><span
style="font-size:12.0pt;font-family:"Times New
Roman","serif";color:#1F497D"><o:p></o:p></span></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman","serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><b><i><span
style="font-size:14.0pt;font-family:"Times New
Roman","serif";color:#1F497D">Skagit
Law Group, PLLC<o:p></o:p></span></i></b></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman","serif";color:#1F497D">P.O. Box
336 / 227 Freeway Drive, Suite B<o:p></o:p></span></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman","serif";color:#1F497D">Mount
Vernon, WA 98273<o:p></o:p></span></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman","serif";color:#1F497D">360.336.1000<o:p></o:p></span></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman","serif";color:#1F497D">360.336.6690
(fax)<o:p></o:p></span></p>
<p class="MsoNormal"><a moz-do-not-send="true"
href="http://www.skagitlaw.com/"><span
style="font-size:10.0pt;font-family:"Arial","sans-serif";color:blue">http://www.skagitlaw.com</span></a><span
style="font-size:10.0pt;font-family:"Arial","sans-serif";color:#1F497D">
</span><span
style="font-size:12.0pt;font-family:"Times New
Roman","serif";color:#1F497D"><o:p></o:p></span></p>
<p class="MsoNormal"><o:p> </o:p></p>
</div>
</div>
</blockquote>
<blockquote type="cite">
<div><span>_______________________________________________</span><br>
<span>WSBAPT mailing list</span><br>
<span><a moz-do-not-send="true"
href="mailto:WSBAPT@lists.wsbarppt.com">WSBAPT@lists.wsbarppt.com</a></span><br>
<span><a moz-do-not-send="true"
href="http://mailman.fsr.com/mailman/listinfo/wsbapt">http://mailman.fsr.com/mailman/listinfo/wsbapt</a></span></div>
</blockquote>
<br>
<fieldset class="mimeAttachmentHeader"></fieldset>
<br>
<pre wrap="">_______________________________________________
WSBAPT mailing list
<a class="moz-txt-link-abbreviated" href="mailto:WSBAPT@lists.wsbarppt.com">WSBAPT@lists.wsbarppt.com</a>
<a class="moz-txt-link-freetext" href="http://mailman.fsr.com/mailman/listinfo/wsbapt">http://mailman.fsr.com/mailman/listinfo/wsbapt</a></pre>
</blockquote>
<br>
</body>
</html>