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Accounting, Finance, SPSS
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Research Paper
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English (U.S.)
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Assignment 4: Tax-Planning Client Letter on Irrevocable Trusts, Gift Tax, and Estate Tax

Research Paper Instructions:

Reference page needed
Suppose you are a CPA, and your client has requested advice regarding establishing an irrevocable trust for his two (2) 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 twenty (20) years.

Use the Internet and Strayer Library to research the rules regarding irrevocable trusts, gift tax, and estate tax. Be sure to use the six (6) step tax research process in Chapter 1 and demonstrated in Appendix A of your textbook as a guide for your written response.

Write a one to two (1-2) page letter in which you:
Analyze the effect of an irrevocable trust on the gift tax and future estate taxes.
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.
Use the six (6) step tax research process, located in Chapter 1 and demonstrated in Appendix A of the textbook, to record your research for communications to the client.
Your assignment must follow these formatting requirements:
Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
The specific course learning outcomes associated with this assignment are:
Create client, internal, and administrative documents that appropriately convey the results of tax research and planning.
Analyze and research tax issues regarding trusts and estate and gift tax.
Create an approach to tax research that results in credible and current resources.

Research Paper Sample Content Preview:

Tax Planning
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If I am a CPA, I would like to make it clear that stocks transferred to a receiver of an irrevocable trust or a revocable trust need to undergo taxation. This is a situation where a gift tax liability is applicable. The Internal Revenue Service or IRS clarified the gift and estate tax limits in 2015 besides the federal estate tax exemption (Donaldson, 2007). At that time, it was said that every individual would pay up to $5.43 million and the sum of annual gift exclusion was said to be $14,000. I would also like to say that the stated amount does not include the amount spent on the gifts given to a spouse or a partner. In case the amount exceeded $14,000, it was taxable at the flat rate of 35 percent. Every single person was responsible for giving the gift tax return, and the phenomenon was called Form 709. This means all individuals filled this form; the individuals who received the gifts were not subject to gift tax and this was made clear in the regulations. Also, we need to remember that the future estate taxes are levied on the fraction of the total amount of an ill individual’s estate, which is more than the gift tax exclusion and this is applicable from the year when the taxpayer dies. At the same time, regulations make it clear that the executor of the ill taxpayer is responsible for filling Form 706 in case the estate owes the estate tax. The ...
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