THE EVERETT ADVOCATE – FRiDAy, AugusT 4, 2023 Page 11 IRS Revenue Ruling 2023-2 ant to IRC Sections 671-678, the grantor will be treated as the owner for “income tax” purposes. However, with an irrevocable gifting trust, the assets held in such a trust are not afforded the step up in cost basis. This means that the assets held in trust upon the grantor’s death will not receive a new cost basis equal to the fair market value at the time of death. The grantor’s original cost basis of the assets will be passed along to the beneficiaries of the trust. This ruling confirms that you cannot have T he Internal Revenue Service in March of this year confirmed that the assets of an irrevocable grantor trust that are not included in the grantor’s gross taxable estate do not receive the step up in cost basis upon the grantor’s death pursuant to Internal Revenue Code (IRC) Section 1014(a)(1). The types of irrevocable trusts that are the subject matter of this revenue ruling are irrevocable gifting trusts where the grantor of the trust is gifting assets out of his or her estate in order to avoid having those assets includible in his or her gross taxable estate for estate tax purposes. For larger estates, such a technique may well be a good strategy as once your estate is taxable for federal estate tax purposes, the federal estate taxes are significant. Although the federal estate tax exemption is currently $12.9million for taxpayers dying in 2023, it is slated to drop down back to $6million in 2026, failing legislation to extend the estate tax provisions currently in place. When assets are transferred to such a Trust, a completed gift has occurred for gift tax purposes. If the grantor retains powers pursuCONCERT | FROM PAGE 5 touring and recording musician, Jon went west, creating his production company “Electric Factory” spending time scoring music for television and film. His music appeared in the HBO series Deadwood, TV’s Ugly Betty, My Names is Earl and more. Joining Butcher is Sal Baglio, is his bandmate in Butcher, Baglio and Estes. Sal, from Eastie, was frontman for New England’s summertime party band the Stompers. If you lived in New England between 1983 and 2021, and went out to party, more likely than not, you saw Sal and the band on stage in some sweat drenched venue where everyone was dancing your cake and eat it too when it comes to these irrevocable gifting trusts. The assets in the trust must be includable in the grantor/ decedent’s estate for estate tax purposes in order to gain the valuable step up in cost basis. This ruling does not affect the typical Medicaid irrevocable trusts which are designed to achieve grantor-type trust status for income tax purposes and to provide for the inclusion of highly appreciated assets, such as stocks and real estate, in the grantor’s taxable estate. Provisions included in these trusts are designed to prevent a completed gift from occurring when assets are transferred to the trust. It may very well be that no federal estate tax will be paid or no Massachusetts estate tax will be paid, but if the trust assets are included in the taxable estate, the step up in basis will be achieved. The Massachusetts state legislature will hopefully increase the estate tax exemption to $2million. It is currently $1million. It would be great if the legislature adopted estate tax portability thereby providing a married couple with a total estate tax exemption of $4million. Upon the death of the first spouse, everything could pass to the surviving spouse estate tax free based upon the unlimited marital deduction. Upon the surviving spouse’s subsequent death, he or she would then be entitled to the deceased spouse’s $2million exemption plus his or her own $2million exemption, for a total of $4million. You would see less taxpayers leave Massachusetts for a more tax-friendly state. Joseph D. Cataldo is an estate planning/elder law attorney, Certified Public Accountant, Certified Financial Planner, AICPA Personal Financial Specialist and holds a masters degree in taxation. and singing with him, for the entire show. Drawing packed houses throughout the region performing hits such as Never Tell an Angel, American Fun, Coast to Coast and Palisades Park. The band never let up and they just screamed summertime. The show will be great featuring two of greatest frontmen in Boston’s music. One uses his guitar like a fine instrument, while the other uses his as a sludge hammer. But together it is a show you don’t want to miss. Tickets are available at: GIMMELIVE.COM This event is a benefit concert, 100% of profits from this series will go to Veterans organizations in the area. 425r Broadway, Saugus Located adjacent to Kohls Plaza Route 1 South in Saugus at the intersection of Walnut St. We are on MBTA Bus Route 429 781-231-1111 We are a Skating Rink with Bowling Alleys, Arcade and two TV’s where the ball games are always on! PUBLIC SKATING SCHEDULE 12-8 p.m. Sunday Monday Tuesday $9.00 Price includes Roller Skates Rollerblades/inline skates $3.00 additional cost Private Parties 7:30-11 p.m. $10.00 Price includes Roller Skates Adult Night 18+ Only Wednesday Thursday Friday Everyone must pay admission after 6 p.m. Private Parties Private Parties 4-11 p.m. Saturday 12-11 p.m. $9.00 $9.00 Everyone must pay admission after 6 p.m. Sorry No Checks - ATM on site Roller skate rentals included in all prices Inline Skate Rentals $3.00 additional BIRTHDAY & PRIVATE PARTIES AVAILABLE www.roller-world.com Advocate Online: www.advocatenews.net
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