Laws, Regulations & Annotations

P

625.0000 PARENT-CHILD TRANSFER

Annotation 625.0235

625.0235 Trusts-Share and Share Alike. When a parent transfers property to a trust which provides that the children are to receive the trust assets on a share and share alike basis, unless the trust instrument specifies otherwise, the trustee has the power to distribute the property on a pro rata or non-pro rata basis. The distribution of sole ownership of a single asset to one child would qualify for the parent-child exclusion, except to the extent the value of the asset exceeds the value of that child's interest in the total trust estate. Such excess must be considered a non-excludable transfer from the other beneficiaries pursuant to a sale of their interests to the recipient. C 8/6/1990; C 1/23/1991; C 9/10/1996; C 10/28/1999.

Note: Amended to remove the C 3/14/2000 correspondence. Valuation should be done at date of death (i.e., when the trust becomes irrevocable). The 3/14/2000 letter isn't focused on that and does not address the discrepancy between the date of death value and the date of distribution value. While this discrepancy could be reconciled, it is confusing exactly what it is saying.