InstantForum.NET v4.1.4California Society of CPAshttp://forums.calcpa.org/forums@calcpa.orgWed, 16 May 2012 17:59:59 GMT20http://forums.calcpa.org/Topic597-2-1.aspxThat's the $64 question: whether you can find any support for this logic in the tax cases, or alternatively, whether this is an area of first impression. Maybe you can find a case that rests on an interpretation of state law about present and future interests, and extrapolate from there.Tue, 17 Jun 2008 16:49:28 GMTJohn Jacobsonhttp://forums.calcpa.org/Topic597-2-1.aspxJust a thought to follow up on John's lastest comment. Holding property for appreciation could give rise to a classification as investment interest. Interest paid on rental proprty would be passive.Mon, 16 Jun 2008 21:18:08 GMTMary Kay Fosshttp://forums.calcpa.org/Topic597-2-1.aspxWhat's different in your case (from the typical "accumulation" future interest as explained in Cristofani) is that use of the residence is a function of time. In other words, one could look at this as the trustee granting one of the present beneficiaries the right to use the property for a set period (i.e. one month) and for that time, the beneficiary appears to have a "limited present interest," at least under California law. (See Calif. Civil Code Sec. 688 and following.) Without research, I realize this may be untested territory, but if you can't say its investment interest because the trustee is not charging rent .....</P><P>I would be curious if any of the tax cases distinguish between limited and perpetual present interests.Mon, 16 Jun 2008 13:47:22 GMTJohn Jacobsonhttp://forums.calcpa.org/Topic597-2-1.aspxThe "distribution" I am thinking of is use of the vacation home. I'm not sure whether this could be thought of as an "accumulation" under Civil Code Section 722 because the use is a function of time. Does the trustee charge rent for each use?Thu, 12 Jun 2008 13:18:16 GMTJohn Jacobsonhttp://forums.calcpa.org/Topic597-2-1.aspxYou might look at Cristofani, <br><br>http://purdue.giftlegacy.com/giftlaw/glawpro_cases.jsp?WebID=GL2007-1252&ID=31<br><br>an example of tax litigation over the issue of present v. future interest. Looks to me like the s/s and the Decedent's issue qualify as present beneficiaries, and the issue of both qualify as future beneficiaries.Tue, 10 Jun 2008 21:17:40 GMTJohn Jacobson