A Beneficiary as Trust Owner: Decoding Section 678
ACTEC Journal, Vol. 35, No. 2, p. 35, Fall 2009
17 Pages Posted: 25 Nov 2009 Last revised: 28 Mar 2010
This article explores the circumstances under which a person who does not contribute property to a trust can be considered its "owner" for income tax purposes. The article focuses particularly on whether the a beneficiary's power to distribute trust property to himself or herself, subject to an ascertainable standard, should be treated as the income tax owner of some portion of the trust property. The article then examines whether a holder of an unrestricted power of withdrawal that has lapsed may continue to be treated for income tax purposes as the owner of some portion of the trust property.
Keywords: grantor trust, income tax, trust, ascertainable standard, right of withdrawal, lapse, 687
JEL Classification: K19, K34
Suggested Citation: Suggested Citation