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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Tax Law

Date & Time
  • event Date

    Thursday, March 11, 2021

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

  • BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

$347.00
CLE
CPE
ALL

This CLE/CPE course will guide tax professionals and advisers with an in-depth analysis of tax implications of liquidating trusts for bankrupt or distressed companies. The panel will discuss key tax considerations in forming liquidating trusts to settle certain debts, collecting and holding assets, and liquidating assets. The panel will also discuss the classification of the trust for tax purposes, income tax filing requirements, and other key tax considerations of liquidating trusts.

Faculty

Cherie K. Sanderson
Tax Director
Grant Thornton

Ms. Sanderson has an extensive trust background and has been involved in bankruptcy trust work for several years. She assists trustees with compiling and understanding financial data and tax reporting to the beneficiaries.

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Brian Angstadt
Senior Manager
Grant Thornton

Mr. Angstadt is a Senior Manager in our Mergers and Acquisitions Tax Services in Atlanta, GA. For over 14 years, he has supported and advised companies throughout the business lifecycle on incorporations, acquisitions, mergers and reorganizations, leveraged buyouts, recapitalizations, liquidations, divesture, corporate distributions, and bankruptcies.

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Description

A liquidating trust can be used to facilitate the winding down or reorganization of a bankrupt or distressed company. The structuring and administration of a liquidating trust has wide-ranging tax implications that must be carefully considered by tax professionals, advisers, and fiduciaries.

Liquidating trusts allow debtors an alternative under circumstances where assets cannot be sold in a Section 363 or other sale. A liquidating trust must be structured to liquidate assets and avoid carrying on a profit-making business to be characterized as a grantor trust for purposes of the Code, along with other critical requirements.

These trusts are separate legal entities with complex tax filing requirements with minimal guidance from the IRS. Most liquidating trusts are crafted with the intent of being classified and filed as a grantor trust or a complex trust under Treas. Reg. Sec. 1.671-4(a) using Form 1041. However, under certain circumstances, the trust may be established and filed as a qualified settlement fund using Form 1120SF. If classified as a grantor trust, it will be a disregarded entity with all income, deductions, and credits treated as belonging to and reportable by the grantor.

Listen as our panel discusses debtor/creditor status prior to formation, tax issues in forming liquidating trusts to settle certain debts, collecting and holding assets, and liquidating assets. The panel will also provide an in-depth analysis of the trust classification, filing requirements, and other related challenges.

Outline

  1. Debtor/creditor status prior to trust formation
  2. Structuring a liquidating trust
    1. Formation
    2. Fiduciary responsibilities
    3. Characterization of the trust
  3. Liquidating trust transactions
  4. Income tax compliance and filing requirements

Benefits

The panel will review these and other key issues:

  • When would a liquidating trust best be utilized?
  • What are the key considerations in structuring liquidating trusts for bankrupt and distressed companies?
  • What are the tax implications of liquidating trusts?
  • What is the interplay between liquidating trusts and grantor trust rules, and what challenges arise?
  • What are the income tax compliance rules, filing requirements, and pitfalls to avoid for liquidating trusts?

NASBA Details

Learning Objectives

After completing this course, you will be able to:

  • Ascertain the key tax considerations for structuring liquidating trusts for bankrupt and distressed companies
  • Identify the tax implications of liquidating trusts and methods to minimize unintended tax consequences
  • Recognize the interplay between liquidating trust rules and grantor trust rules under the Code and their impact on trust strategies
  • Understand the income tax compliance rules, filing requirements, and pitfalls to avoid in liquidating trusts
  • Ascertain effective techniques in handling an IRS examination of liquidating trusts

  • Field of Study: Taxes
  • Level of Knowledge: Intermediate
  • Advance Preparation: None
  • Teaching Method: Seminar/Lecture
  • Delivery Method: Group-Internet (via computer)
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
  • Prerequisite: Three years+ business or public firm experience at mid-level within the organization, preparing complex income tax forms and schedules for corporations and pass through entities; supervisory authority over other preparers/accountants. Knowledge and understanding of corporate and partnership structures, dissolution and related taxation.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).