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Form 709 for Irrevocable Trusts

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  • Form 709 for Irrevocable Trusts

    When filing a form 709 in addition to seeking out a good CPA I was curious about applying the exemption of 11.58 million dollars to the GST tax. Can you do this for subsequent years in a indirect skip trust? For example let say I gift 70k to the trust then I cannot use the annual exclusion of 15K. Lets the trust grows in value and I do not put any more money in can I use what's left of the total lifetime exemption of 11.58 for the remainder of the trust as it continues to grow assets. For example lets say I do not want the irrevocable trust to distribute assets until 35 years from now. Would the total lifetime exemption also apply to the trust in perpetuity until exhausted or does the IRS consider the 70k a completed gift and so no further exemption other than what is claimed is allowed?


    I am not interested in crummy powers for 15K annual gift.

    Thank you

  • #2
    Done properly, I believe you can still use the $15k exclusion to a qualifying GST trust. The trust should not be subject to your personal estate tax exclusion. But, if you’re talking about that much money, why are you not interested in Crummey powers? Yes, the $70lk (again, if handled properly) s/b considered a completed gift.

    This is a very complicated area. Be sure to seek out experienced legal and tax advice.
    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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    • #3
      The reason I am not considering crummy powers is that the trust will distribute in a lump sign when I am dead, the 14K gift exclusion may no longer be there.
      Do you know who I can seek out in Texas like a CPA who I can pay or ask to help me file this form. Penalties for this form are stiff

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      • #4
        Originally posted by rick43221 View Post
        The reason I am not considering crummy powers is that the trust will distribute in a lump sign when I am dead, the 14K gift exclusion may no longer be there.
        Do you know who I can seek out in Texas like a CPA who I can pay or ask to help me file this form. Penalties for this form are stiff
        It’s now $15k/yr, fyi. Don’t know who to seek out in TX, but why is that important to you? An experienced CPA should already be quite familiar with TX code. It is far more important to find a great CPA familiar with physician situations than a generalist CPA who happens to live in your state. Jmpo, of course.
        Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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        • #5
          I'm curious, are you preparing the trust document yourself? I always need to know what the rest of a person's estate plan is before making a recommendation on a trust; we're diving into a complex conversation at the tail end of it so I'm leary of making recommendations without knowing a lot of other information, but here are a few thoughts. Unless you've done other massive gifting, a $70k irrevocable trust won't have any tax issues you need to worry about besides filing the 709, and perhaps income tax issues you should plan around or at least consider. You'll want a good estate planner, and perhaps CPA, to help you (this depends on the estate planner you go with; we can file 709s for clients easily enough). It's just not worth your time to learn enough to avoid the unforgiving mistakes that can easily be made in these areas. It sounds like you definitely know enough to get right to the point when you meet with an estate planner so that's very helpful.

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          • #6
            Is there anyway to avoid exorbitant fee of 1500$ to fill out the 709. i am wondering if HR block can help

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            • #7
              Originally posted by rick43221 View Post
              Is there anyway to avoid exorbitant fee of 1500$ to fill out the 709. i am wondering if HR block can help
              Why is it exorbitant? Just curious.

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              • #8
                I am looking for a one off CPA just to help me fill out a 709 I filled it out myself for the trust I want to spend 500$ to pay the CPA. Any recommendations

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                • #9
                  I think is exorbitant compared to the value of the trust. I looked at the form filled it out and it seems straight forward but trust company wants me to seek out a cpa

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                  • #10
                    Originally posted by rick43221 View Post
                    I think is exorbitant compared to the value of the trust. I looked at the form filled it out and it seems straight forward but trust company wants me to seek out a cpa
                    Professionals don’t calculate the value of the work based upon the value of the assets. Wouldn’t you take offense with a CPA charging you more simply because you are a highly paid physician, even though you have a simple 2-W2 return? They bill (or should bill, impo) on the work required and the degree of exposure they incur in taking on a case that is more likely to be challenged, for starters. The admin time to set up a new client and go through 2 reviews, check for what may be omitted and communicate with the client, and be available to answer questions, explain positions, etc. for a “low-value” trust can be significant, regardless of what you think it should be. So a quality firm that is expecting no more business from you will be eating a lot of time simply to rush a return out the door to meet your expectations of the value of the product.

                    No thank you. Check with HRB or JH.
                    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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                    • #11
                      I will go with HRblock certified accountant, I agree I need to see a tax professional
                      They charge $395 to do the form

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