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<body class='hmmessage'><div dir='ltr'>Pilgrims: Diana, Austin Bramwell (of the gift by promise fame) and I have largely finished a rather detailed article on portability. A difference of opinion has arise on the following.<BR> <BR>Let's say John dies, creates a QTIP trust for Carlyn and his estate makes the Reverse QTIP election and allocates a sufficient amount of John's GST exemption to the QTIP to make it have a zero inclusion ratio. Carlyn then assigns her income interest to a new trust. All three of us are in agreement that she will have made a 2511 gift as to the income (and a 2519 gift of the principal). Assuming for the moment that Carlyn does not allocate GST exermption to the trust, is the actual income earned in the QTIP trust paid to the trust to which CSM has assigned her income interest exempt from GST tax by reason of the allocation of John's GST exemption to the QTIP trust?<BR> <BR>The IRS in a 2001 PLR indicates that there are two transferors: John and Carlyn based upon the value of Carlyn's income interest when assigned to the value of trust (e.g., if the income had a gift tax value of $500,000 and the trust had a value of $5mm when CSM assigned her income right, CSM would be the transferor as to 10% and John 90%).<BR> <BR>Another possibility is that CSM is the transferor of all the income from the QTIP trust that is paid pursuant to Carlyn's assignment to the new trust and none of it is protected from GST tax (except to the extent Carlyn has allocated her own exemption on the assigned income interest).<BR> <BR>The dispute really revolves about how credible the first case is. Austin has written something up on it which Bill Crawford has just send out to all committee member.. I plan to raise this in the meeting tomorrow and Diana I would appreciate your views. Thanks very much. Jonathan<BR><BR> <BR>
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Date: Tue, 5 Mar 2013 19:07:47 -0500<BR>From: wlcrawford@actec.org<BR>To: estgift@actec.org<BR>Subject: [EstGift] The Dueling Transferors Problem in a Nutshell<BR><BR>
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<P class=ecxMsoNormal><B><SPAN style="FONT-FAMILY: 'Calibri','sans-serif'; COLOR: #1f497d; FONT-SIZE: 11pt">Sent on behalf of Jonathan Blattmachr</SPAN></B></P>
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<P class=ecxMsoNormal><SPAN style="FONT-FAMILY: 'Calibri','sans-serif'; COLOR: #1f497d; FONT-SIZE: 11pt">Attached please find “The Dueling Transferors Problem in a </SPAN><SPAN style="FONT-FAMILY: 'Calibri','sans-serif'; COLOR: #1f497d; FONT-SIZE: 11pt">Nutshell” </SPAN><SPAN style="FONT-FAMILY: 'Calibri','sans-serif'; COLOR: #1f497d; FONT-SIZE: 11pt">by Austin W. Bramwell.</SPAN><SPAN style="FONT-FAMILY: 'Calibri','sans-serif'; COLOR: #1f497d; FONT-SIZE: 11pt"></SPAN></P></DIV></DIV></DIV><BR>_______________________________________________ EstGift mailing list EstGift@actec.org http://lists2.fsr.net/cgi-bin/listinfo/estgift</DIV> </div></body>
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