Income Tax Considerations in Estate Planning and Estate and Trust Administration
The current tax environment requires particular focus on income tax issues that arise in drafting and planning as well as in trust and estate administration. Specifically, avoiding compressed tax brackets and facilitating basis step-up is often critically important.
We should regularly consider the following in our practices:
- Benefits and detriments of grantor versus nongrantor trusts
- Options to achieve basis step-up
- Minimizing trust-level income taxes
- Costs subject to the two-percent floor under IRC § 67(e)