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IRS PLR: Transfer Between Two Trusts Owned by Same Person Isn’t Sale (IRC §671)

May 29, 2020, 5:00 AM

Where a trust’s (“Subtrust”) sole beneficiary is treated as its owner, as she has a power exercisable by herself to vest certain sale proceeds (the trust’s only asset) in herself, the transfer of such asset to another trust wholly owned by her isn’t recognized as a sale for federal income tax purposes, the IRS ruled. The ruling is conditioned on the receiving trust being a grantor trust with respect to the beneficiary and on her having authority with respect to Subtrust as represented, the IRS said. [PLR 202022002]

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