Discussion:Qualified Personal Residence Trust
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Discussion Forum Index --> Tax Questions --> Qualified Personal Residence Trust
| 23 June 2007 | |
| Dennis, can you help with this question?
Do you have experience in irrevocable trust taxation of a PRT. The residence is worth Approx $750,000 with 7520 rate 4%. The 10 yr value appears to be $243,327. What are gift and income tax consequences if property appreciates to $1,400,000 in 10 yrs? I can not find anything about appreciation, only salvage value in calculation. Does the calcuation change if grantor dies prior to 10 yr period, ie 7 or 8 years? thank you, Bcompton | |
| 23 June 2007 | |
| The Gift is fmv of the property less the value of the ten year income stream (see example in Publication 1457). If donor dies before the ten years the date of death value of the property is includible in his gross estate. After ten years the trust terminates and property passes. Appreciation will be taxable gain to remainderman on sale. | |
| 23 June 2007 | |
| Dennis, how do we calculate the income, gift, and estate taxes for 10 yr period? | |
| 23 June 2007 | |
| Dennis, Is fmv of gift based on current value or future value ($750,000 or $1,400,000). Who pays income tax on annual stream? At termination, does remainderman have reporting requirements, or not reportable until sale of property. thanks. | |
| 24 June 2007 | |
| Sorry, I don't do that. | |
| 25 June 2007 | |
| Dennis, sorry to bother you with simple questions, but I am not a CPA by any means. I just need help with a couple of questions and can't find a resource. In the QPRT, if the present value is $750,000, the income right for 10 years is $243,327. Does this mean the Donor's Taxable Gift is the difference between the two?
Thanks, Barry | |
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