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One such election is the Section 643(e)(3) election, which permits a fiduciary to treat the distribution of in-kind property as having been sold by the entity to the beneficiaries at fair market value (FMV), thereby triggering potential gain, among other consequences.
Under IRC 643(g), a fiduciary can make an election by filing Form 1041-T Allocation of Estimated Tax Payments to Beneficiaries within 65 days after the close of the tax year to have estimated payments allocated to the beneficiaries on their Schedule K-1.
The new Irrevocable Non-Grantor Spendthrift Trust is a Section 643 compliant Trust that is a powerful but complex instrument, used for both wealth protection and tax management. IRS IRC Section 643 only emerged around 2008. Tax planners, CPAs and Attorneys are just waking up to the power of this type of Trust.
A trust or, for its final tax year, a decedents estate may elect under section 643(g) to have any part of its estimated tax payments (but not income tax withheld) treated as made by a beneficiary or beneficiaries.
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