New Tax Laws Make Some Trusts’ Investment Income Taxable in 2014

Read the Bloomberg report: Trusts' Net Investment Income Also Taxable In Beneficiary's Hands Under New IRS Rules (opens in new window)
Read the Bloomberg News report: Trusts’ Net Investment Income Also Taxable In Beneficiary’s Hands Under New IRS Rules
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An article published on Bloomberg’s website BNA.com reported on recent changes to the tax laws that make some trusts’ previously-exempt net investment income taxable in 2014.

According to the report, Adrienne Mikolashek, an attorney with the IRS Office of Chief Counsel, stated, “Once a trust distributes net investment income to a beneficiary under the Internal Revenue Service’s recent NII tax rules, the income retains its character as investment income in that beneficiary’s hands.”

The article addresses some of the issues practitioners still face under the IRS’s proposed (REG-130843-13) and final (T.D. 9644) regulations on the 3.8 percent net investment income tax. Comments were provided by Mikolashek and several other practitioners during a Feb. 18 American Law Institute Continuing Legal Education program aimed at trusts and family businesses.

For more details, read: Trusts’ Net Investment Income Also Taxable In Beneficiary’s Hands Under New IRS Rules (2/15/2014). (opens in new window)
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