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Home » CalCPA Discussion Forum » Estate Planning » loss on funding the bypass trust

loss on funding the bypass trust Expand / Collapse
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Anonymous
Posted 3/22/2008 3:45:37 PM




It is my understanding that you can not recognize a loss on funding the bypass trust, if your funding clause is marital deduction pecuniary/fairly representative/date of distribution funding clause. Does any one know if this is correct?
thank you
Post #561
Posted 3/26/2008 10:04:03 AM
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Last Login: 2/16/2010 6:30:43 PM
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Yes this is correct. You run afoul of the related party rules. The "loss" is suspended until there is a disposition of the loss property - of course it's not as simple as that. You need to follow the examples in the code section.

Look at section 267. The relationships in (b) bring the section into play. I don't remember now if it was the regulations or RIA commentary that explained how the loss eventually is triggered.

Mary Kay Foss

Post #562
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