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SOP2109 - Planning to Obtain an Increased Cost Basis at Death

‐ Nov 16, 2021 2:45pm

The current estate, gift and GST tax exemption exempts all but the super-rich from Federal transfer taxes. However, the income tax remains. Numerous provisions in the Internal Revenue Code allow for a basis adjustment at death to minimize or, in some cases, eliminate gain. This session will begin by discussing those types of assets that will benefit from a basis increase. We will then discuss planning ideas to obtain an increased cost basis at death for those assets for which such an increase will be beneficial. Among the planning topics discussed will be the use of “upstream” outright gifting and gifts to grantor trusts while avoiding Section 1014(e), the importance of discretionary distribution provisions in trusts in obtaining a basis increase, how a “swap” power in a trust can aid in obtain a basis increase and the use of powers of appointment, including formula powers of appointment, to obtain a basis increase. Also, an overview of the Delaware tax trap and why that may or may not result in an increase in cost basis.

Learning Objectives:

  • Learn the various provision of the Internal Revenue Code that govern the determination of cost basis.
  • Discover how careful planning an use the basis rules can increase the cost basis for a person’s heirs.
  • Learn how to use “upstream” planning and general powers of appointment to increase the cost basis of an assets and the traps that may exist in implementing such planning.



Concurrent Session Onsite and Online

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