14

Page 14 THE MALDEN ADVOCATE–Friday, October 20, 2023 MUSINGS | FROM PAGE 6 GRANTOR TRUSTS A Grantor Trust is a trust in which one or more “donors” or “other persons” are treated as “owning” all, or a portion of, a trust for federal income tax purposes.The donor is often referred to as the settlor or the grantor as well.The applicable tax law is found in Internal Revenue Code (IRC) Sections 671 through 679 (the “Grantor Trust Rules) and the corresponding regulations thereunder. Assets owned by a Grantor Trust may be included or excluded from the decedent’s estate for federal estate tax purposes. The determination of whether or not those assets will be included in the donor’s estate depends on the provisions found in the trust instrument itself. In order for the assets of the Grantor Trust to be excluded from the decedent’s estate, the transfer of assets into the trust must be considered to be a “completed” gift, and the donor must not retain one of the prohibited powers or interests as set forth in IRC Sections 2036, 2037, 2038, 2041 and 2042. An example of a power retained under IRC Section 2036 is a right to use, occupy and possess the real estate that was transferred to the trust. In that situation, the entire value of the property would be includible in the donor’s estate for estate tax purposes upon his or her death. Not a problem for federal estate tax purposes so long as the decedent’s estate is less than $12.92million. The Massachusetts estate tax exemption has increased from $1million to $2million just several weeks ago. You should also note the federal gift tax exemption is $12.92million and that Massachusetts has no gift tax. Therefore, a parent can gift $500,000 to a child one day before dying thereby reducing the gross estate from $2.5million to $2million and completely avoid the Massachusetts estate tax. Regardless of whether the transfer to a trust is treated as a completed gift for federal gift tax purposes, or whether the trust assets are to be included in the donor’s estate for federal estate tax purposes, the federal “income tax” result is the same: Each donor of a Grantor Trust is taxed on all of theincome, deductions, gains,losses and credits of the trust assets to the extent that the donor is treated as the owner of the trust. Therefore, you look to the Grantor Trust Rules in order to determine who owns the assets of the trust for federal income tax purposes. This determination of ownership, however, is not to be confused with the tax treatment of the trust for federal “gift” and “estate” tax purposes, or who may own the trust assets for state property law purposes. IRC Section 671 provides the general rule that a donor or some other person who is found to be an “owner” of all or a portion of a trust must report and pay tax on the portion of the trust that the donor (or such other person) is treated as owning. Sections 673 through 679 (with the exception of Section 678) provide specific rules that cause a “donor” to be treated as an “owner” of all or a portion of a trust. Section 678 deals with the situation in which someone other than the donor is treated as the owner. There must also be a gratuitous transfer to the trust for the Grantor Trust Rules to apply. The Ownership Rules will usually apply when a donor is deemed to have a specific interest or power over a trust. A donor may be treated as owning all or a portion of the “income” of a trust. Also, a donor may be treated as owning all or a portion of the “principal” of a trust. Why is all of this important? It is the Grantor Trust Rules that provide the answers as to where to report the Trust’s gross income, capital gains or losses, deductions or tax credits: on a trust income tax return or on the individual income tax return of the donor. Since there are so many trusts that have been executed and funded, it is important to understand the corresponding tax implications. Joseph D. Cataldo is an estate planning/elder law attorney, Certified Public Accountant, Certified Financial Planner, AICPA Personal Financial Specialist and holds a master’s degree in taxation. group of guys noted above ascended to GBL championships in our junior and senior seasons. So many challenges overcome; so much hard work; so much fun and funny stories; so many great, lifetime friendships; so many memories that live on!! “Thanks to all the guys in the classes of ’74, ’75, ’77 and ’78 in addition to my ’76 teammates above. You’ve all contributed to what was an amazing period in MHS history. Just so happy and thankful to have been a part of TESTING | FROM PAGE 3 told the School Committee, due to the improvement by English Learners, those whose first language is not English and are in immersive English language learner classes. The progress toward English language proficiency showed results that had doubled in positive results. Malden Public Schools has over 1,000 students in this category of the 6,300 enrolled overall. “We are encouraged by the overall results, as there are improvements at a lot of grade levels and at various schools,” Supt. Noriega-Murphy told the School Committee, “but we have more work to do, and there are many PAY | FROM PAGE 3 or is one of the lowest paid fulltime municipal chief executives in Massachusetts, particularly for a city the size of Malden. Additionally, it is believed that Mayor Christenson is the only full-time employee of the several thousand in the City of Malden who has not received a pay increase since 2012. According to some quick research, the Mayor’s position and the pay rate of the 11 members of the Malden City Council ($17,500 annually) are the only it. Best to you all after 50 years!!” As Peter Falk’s iconic TV character Columbo would say, “Just one more thing, sir” – apropos of nothing... “Am I mortified!!” said in my best Jimmy Durante voice! Thursday, August 17 – the five o’clock whistle blows – I dash out of the office, straight to the Nissan Versa, put on WMEX AM 1510 (The Wonder of You – Elvis), then exit the parking garage on Jackson Street excited to get home and see the grandkids. Before you could say Jackie Robinson, BAM! Traffic jam/ gridlock on Exchange Street! No areas where there could be improvement. We are grateful to our educators who are so passionate about helping our students achieve success in our district.” Malden’s data analyst Stazesky explained that Malden is very close in all categories, and equal in some, to the Massachusetts state average – all schools – which was also encouraging, she said. Another highly positive aspect of Malden’s MCAS testing results, Stazesky explained, is that from the 2022 results, there is a program called DART – which appears on the DESE website – where Malden stacks up very well to the 10 “alike” districts and communities. The 10 communities in Malpay rates in the entire city budget which have remained unchanged in the same time frame – since 2012. The new ordinance increases the pay rate for Mayor of Malden to $150,000 annually – still among the lowest for mayors in this region. Ward 5 Councillor Barbara Murphy’s resolution means a raise of $45,000 for the Mayor’s post – up to $150,000 from $105,000 (47.5%); an annual increase of $7,500 for each of the 11 City Councillors – up to $25,000 from $17,500 (42%); and a raise of $4,500 annually for accident, no police emergency, no Boda Borg bus parked in the middle of the street unloading youngsters eager to “experience the quest”! Halfway down Exchange I wish the Horseshoe Bar & Grille were still open. At that point I could have used a cold Gansett and hot dog. No kidding, 11 minutes later – which normally would be a 30 second drive – I am banging a left onto Main Street past the ghost of Jack in the Box. Gotta be honest, it ain’t like that every day, but it should never be 11 minutes for a 30 second drive. Just saying... den’s “alike districts” are Barnstable, Brockton, Chicopee, Everett, Lowell, Lynn, Marlborough, Milford, Revere and Waltham. Malden was below only two of these communities – Barnstable and Milford – in most grades and categories, and above all others. Malden was far above nearby districts, including Everett, Revere, Lynn in particular, as well as Brockton, Chicopee and Waltham in most categories. The results of the MCAS testing across the district are available by viewing the presentation on the DESE website: www. mcas.doe.edu More on Malden’s MCAS results will appear in next week’s edition. the seven members of the Malden School Committee – up to $12,000 from $7,500 (60%). By a unanimous 11-0 vote, the Councillors voted to approve the ordinance. Councillors Peg Crowe (Ward 1), Paul Condon (Ward 2), Linehan (Ward 3), Ryan O’Malley (Ward 4), Murphy (Council President), Stephen Winslow (Ward 6), Chris Simonelli (Ward 7), Jadeane Sica (Ward 8), Craig Spadafora (at large), McDonald (at-large) and Karen Colón Hayes (at-large) all voted in favor of the increase. For Advertising with Results, call The Advocate Newspapers at 617-387-2200 or Info@advocatenews.net

15 Publizr Home