FROM THE OFFICE OF PUBLIC AFFAIRS
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August 23, 2004
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Treasury Issues Guidance on Qualified Severances Of Trusts
The Treasury Department and Internal Revenue Service issued guidance today addressing the requirements for a "qualified severance" of a trust for purposes of the generation-skipping transfer (GST) tax.
"We are pleased to be able to provide guidance in this complex area of the law," stated Acting Assistant Secretary for Tax Policy Greg Jenner. "This guidance should enable taxpayers to achieve the most efficient and effective use of their GST exemptions consistent with the law."
The proposed regulations implement recent statutory changes that expanded the availability of a qualified severance. The proposed regulations provide guidance concerning the proper procedure, permissible timing, and required reporting of a qualified severance, and the permitted methods of funding the resulting trusts.
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