About the Course
Introduction
This CLE/CPE webinar will discuss IRS rules and guidance for irrevocable grantor trusts and issues encountered by trust and estate advisers. The panel will discuss options and key provisions in structuring trusts, Revenue Ruling 2023-2 and its impact on basis and estate and tax planning, determining and substantiating tax basis under current tax law, planning considerations for U.S. persons, and other basis conundrums encountered by estate and trust advisers.
Description
The significant increase in the federal estate tax exemption under current tax law emphasizes the need for estate planners to minimize income taxes for beneficiaries on assets passed through inheritances and trusts. Revenue Ruling 2023-2 provides guidance for certain trusts for federal income tax purposes regarding the tax basis for assets passing from a decedent upon the owner's death and other key issues. Estate planners and advisers must have a complete understanding of these rules and their potential impact on estate and tax planning.
As fewer estates are subject to estate or gift tax, planners and fiduciary advisers must focus on managing tax basis to minimize the tax cost of transferring assets to beneficiaries. Section 1014 allows inheritors to step up the tax basis of assets, which may reduce capital gains taxes. The basis consistency rules allow the IRS to assess penalties under Section 6662 against the estate or beneficiary for basis reporting inconsistencies stemming from valuations aimed at eliminating income taxes. This accuracy-related penalty for the underpayment of tax resulting from a valuation misstatement can be costly for estates and beneficiaries.
Revenue Ruling 2023-2 has confirmed that the basis adjustment under Section 1014 generally does not apply to assets of an irrevocable grantor trust not included in the decedent's estate for federal estate tax purposes. However, estate planners and other advisers still have several tools for basis planning available to them for clients who will likely have taxable estates and those that likely will not.
Estate planners must ensure that any valuation of assets for the purpose of achieving a step-up in basis adheres to the tax basis rules under current law. Estate planning advisers must also consider other options such as gift planning techniques, transfers of assets, and the use of trusts to obtain a step-up in basis and avoid the severe consequences of a misstep.
Listen as our panel discusses options and key provisions in structuring trusts, basis and estate and tax planning, determining and substantiating tax basis, planning considerations for U.S. persons, and other basis conundrums encountered by estate and trust advisers.
Presented By
Ms. Blau is Of Counsel with the Trusts and Estates Department at McLane Middleton. Her practice is focused on the creation and analysis of complex custom-drafted estate plans for high net-worth individuals and families. Ms. Blau also works with Trustees and clients in connection with trust decantings and other aspects of complex trust administration. A dedicated non-profit volunteer, she currently serves as a member of the Board of Advisors of the Handel & Haydn Society, where she is a member of the Planned Giving Committee, and as a member of the Harvard University Awards Committee. Ms. Blau previously served as a longtime Board member of the Harvard Alumni Association Board of Directors and the Board of Visitors of The Fenn School, and as a Trustee of The Concord Free Public Library Corporation.
Ms. Young focuses her practice in the area of trusts and estates law and taxation. She counsels individuals, families and family offices on estate planning matters and business succession planning, including income tax planning and retirement, marital and charitable planning. She works with RSM tax professionals nationally on trust administration issues and estate and trust planning for individuals, families and family offices. She resolves gift and estate tax return examinations at the state and federal level. She presents nationally at conferences on topical estate, trust and gift tax issues. Her planning expertise is concentrated on the income tax aspects of estate planning, including fiduciary income tax minimization strategies (state and federal), charitable planning, marital planning, retirement planning and opportunities presented by decanting.
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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Date + Time
- event
Tuesday, March 31, 2026
- schedule
1:00 p.m. ET./10:00 a.m. PT
I. Revenue Ruling 2023-2
II. Challenges for taxpayers with irrevocable trusts
III. Identifying low basis assets subject to potential income tax consequences
IV. Transfer strategies
V. Post-mortem tools for achieving income tax basis step-up
VI. Potential tax risks of basis adjustment strategies
The panel will review these and other important topics:
- Key provisions and planning considerations in light of Revenue Ruling 2023-2
- Impact on taxpayers with irrevocable trusts
- Reevaluating income tax planning and alternative options for completed gift grantor trusts
- Which class of assets benefit from basis adjustment transactions?
- Using trust decanting and other post-mortem actions to achieve basis step-up
- Structuring sale and exchange transactions between trusts to maximize tax basis
- Tax and other risks involved in basis adjustment transactions and strategies
