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THE REVERE ADVOCATE – FRIDAY, OCTOBER 20, 2023 Page 15 ~ POLITICAL ENDORSEMENT ~ 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 the income, 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 specifi c 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 specifi c 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, Certifi ed Public Accountant, Certifi ed Financial Planner, AICPA Personal Financial Specialist and holds a Master’s Degree in Taxation. A Rhalimi and Novoselsky Cross-Endorsement lexander Rhalimi Councillor at-Large candidate announced his endorsement of Ira Novoselsky for re-election as Ward 2 Revere City Councillor. Ira Novoselsky has been fi ghting to improve Ward 2 for decades. Ira grew up in Ward 2 and has delivered in a big way for the residents of Ward 2 where I have lived for the last two decades, said Rhalimi. His record of getting things done, from streets being repaved to new parks and playgrounds getting built is second to none. “Councillor Ira Novoselsky is committed to the constant improvement of the quality of life for the residents of Ward 2. For over twenty years Ira has been relentless in his pursuit to improve Ward 2. He has worked with the small businesses to establish permit parking in the Shirley Avenue, municipal parking lot to help avoid meter and street parking tickets and fought to bring 30 units of Veterans housing to Shirley Avenue. He has spearheaded many improvement projects in the Ward 2 area which include an upgrade of Costa Park, an upgraded Curtis Park, a new playground at the Garfi eld School, new public stairs at Hillside and Walnut Avenues and the public stairs from Florence Avenue down to Campbell Avenue. Councillor Novoselsky has taken every issue head on and continues to lead for the residents of Ward 2,” Rhalimi said. “I am proud to endorse Alexander Rhalimi for Revere City Councillor at Large,” said Novoselsky. “Rhalimi has worked on various community initiatives and I have witnessed his passion for improving the lives of our residents. His strong work ethic, integrity, and understanding of the challenges our city faces make him a standout candidate.” Alexander Rhalimi holds a Masters degree in Criminal Justice from Boston University. His educational background can Councillor-at-Large candidate Alexander Rhalimi and Ward 2 Revere City Councillor Ira Novoselsky. (Photo courtesy of Aleander Rhalimi) be valuable when interpreting and crafting local ordinances, policies, and regulations as a member of the City Council. His knowledge can inform discussions and decisions related to public safety initiatives, law enforcement practices, and community policing. Throughout his life, Rhalimi has actively engaged with the Revere community. He has volunteered with several local non-profi t organizations and has a deep understanding of the issues that matter most to residents. Rhalimi is currently the principal of Alliance Financial Group, equipping him with a solid foundation in fi scal management and economic matters. Rhalimi expressed his gratitude for the endorsement, stating, “I am deeply honored to have the support of Ward 2 Councillor Ira Novoselsky. His tireless dedication to our community has inspired me, and I am committed to serve with him on the Revere City Council.” Rhalimi is dedicated to fostering a vibrant and inclusive community. His campaign platform is centered around key policy priorities that address the diverse needs of Revere residents. Rhalimi is committed to enhancing community engagement and transparency, ensuring public safety through community policing, and promoting sustainable economic development to create job opportunities. He is a strong advocate for aff ordable housing solutions and equitable housing policies, aiming to provide stable and aff ordable living options for all. Rhalimi also prioritizes education and youth empowerment, aiming to collaborate with local schools and organizations to improve educational outcomes and provide meaningful opportunities for young residents. Additionally, he is passionate about environmental sustainability, advocating for renewable energy initiatives and infrastructure improvements to ensure a greener future and protect the Point of Pines neighborhood. Rhalimi’s platform also emphasizes transportation enhancements for seniors in Revere, social services support, and initiatives that promote diversity, equity, and inclusion, all aimed at building a stronger, more resilient Revere that thrives on community engagement and positive change. Ira Novoselsky is always available by phone at 781.289.7031 and by email at ira_novoselsky@ yahoo.com Alex Rhalimi contact is 617.312.4755 and campaign email is vote@rhlaimiforrevere. org. Back on Track: Football Pats breezes past Somerville for first win By Dom Nicastro N ow that’s how the Revere High School football team can play a little football. The Patriots clicked on all cylinders from start to finish in a 36-0 Greater Boston League victory on the road over Somerville last Friday. It was the team’s fi rst win of the season after fi ve straight losses, the latest a 48-6 setback at the hands of GBL leader Everett. And this one wasn’t close from the start. Revere raced out to a 22-0 lead and never looked back. There was tremendous passing from Carlos Rizzo, unbelievably stifl ing defense, an onsides kick recovery and a blocked punt and fumble recovery for a touchdown. What didn’t Revere do well on FOOTBALL | SEE Page 17

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