Posted: February 16th, 2015

International Estate Planning Benchmark Assignment 2

International Estate Planning Benchmark Assignment 2

PLEASE GIVE SHORT ANSWERS ONLY-NO DISCUSSIONS
If you want, a short explanation could be provided with your response.

1.  What is the number of the tax form that must be filed by a non-resident alien who owns a U.S. business that has effectively connected income?

Answer:

2.  Can the QDOT be used to qualify for the gift tax marital deduction?

Yes or No
Answer:

3. If a U.S. citizen spouse dies and had established a QDOT for his surviving non-U.S. citizen spouse, are capital gains distributions to that surviving spouse subject to estate taxation?

Yes or No
Answer:

4. Who is the party that makes the election to use the QDOT?

Answer:

5. Who is taxed with respect to the income, gains and losses of a “grantor” trust?

Answer:

6. If a U.S. settlor transfers appreciated assets to the trustee of a foreign trust with one or more U.S. beneficiaries, is that transfer (of appreciated property) subject to a capital gains tax?
Yes or No
Answer:

7. When a U.S. settlor of a foreign trust with U.S. beneficiaries dies, the foreign trust generally becomes a non-grantor foreign trust. Assume the settlor of such a trust dies and the settlors’ U.S. citizen children are beneficiaries. If the foreign trust of the foreign trust makes passive investments (not engaged in an active trade or business), is the foreign trust’s U.S. source income subject to U.S. income tax as if the trust were a non-resident alien individual?

Yes or No
Answer:

8. Can a foreign person engaged in a U.S. trade or business deduct the costs, losses and expenses against gross income effectively connected with a U.S. trade or business?

Yes or No
Answer:

9. What is a “gratuitous” transfer to the trustee of a trust?

Answer:

10. Classification of a trust as domestic or foreign has significant tax consequences. A domestic trust is any trust that meets both of the following criteria: (1) a U.S. court is able to exercise primary jurisdiction over administration of the trust; and (2) one or more U.S. persons has authority to control all substantial decisions of the trust. A foreign trust is any trust that does not meet either of these criteria.  Does giving a U.S. court jurisdiction over a trustee, beneficiary or trust property constitute “primary supervision?”

Yes or No
Answer: