Discussion:QTIP property?

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Discussion Forum Index --> Advanced Tax Questions --> QTIP property?
Discussion Forum Index --> Tax Questions --> QTIP property?

Landon5784 (talk|edits) said:

2 October 2008

Husband and deceased wife had a living trust which held a tract of land in her name as separate property. An amendment to the trust specified that the tract of land was to go to her mother if that mother out lived the surviving spouse husband. Land produces no income, and if surviving spouse husband out lives the deceased wife's mother then the land becomes residue of the estate.

Is the land QTIP property?

Riley2 (talk\|edits) said:	2 October 2008
Did the surviving spouse have the right to use the property?

Dennis (talk\|edits) said:	3 October 2008
Riley's point is that the right to use is the income interest necessary to qualify. I do not see that here. The answer depends on who gets the money if mother sells the property.

Landon5784 (talk|edits) said:

3 October 2008

Yes surviving spouse has right to use. If the Mother dies after the surviving spouse dies then mother can dispose to whom ever she wishes.

Also whether or not QTIP property, wouldn't you agree that the land will eventually be included in the gross estate of the surviving spouse either way? (ie if he out lives mom then it is his and he would have to include, and if he doesn't out live mom it would still be included in his gross estate, and then passed to mom according to the trust instructions.)

But same question; is it QTIP property?

Dennis (talk\|edits) said:	3 October 2008
If mother has no rights during surviving spouse's life the land can be QTIP property. Disposition on surviving spouse's death is immaterial, and whether it actually is or not is a matter of election.