Homework: Tax-Planning Client Letter on Irrevocable Trusts, Gift Tax, and Estate Tax
Overview
Suppose you are a CPA, and your client has requested advice regarding establishing an irrevocable trust for his two grandchildren. He wants the income from the trust paid to the children for 20 years and the principal distributed to the children at the end of 20 years.
Instructions
Use the Internet and Strayer Library to research the rules regarding irrevocable trusts, gift tax, and estate tax. Be sure to use the six-step tax research process in Chapter 1 and demonstrated in Appendix A of your textbook as a guide for your written response.
Write a 1 to 2 pages letter in which you:
I. Analyze the effect of an irrevocable trust on the gift tax and future estate taxes.
II. Suggest other significant alternatives that the client could use both to reduce estate tax and to maximize potential advantages of the payment of gift taxes on transfers of property.
III. Use the six-step tax research process and demonstrated in Appendix A of the textbook to record your research for communications to the client.
Format your homework according to the give formatting requirements:
1. The answer must be double spaced, typed, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the homework, the course title, the student's name, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.
The specific course learning outcome associated with this homework is:
1. Determine the effect of an irrevocable trust on taxes including a strategy to reduce taxes and maximize benefits.