Generally, when an estate or trust distributes an asset in-kind to a beneficiary (as opposed to liquidating the asset and distributing cash), there is no gain or loss to the estate or trust, and the beneficiary takes a carryover basis in the asset.
However, the estate or trust may elect to recognize the gain, in which case the beneficiary takes a basis in the asset equal to its fair market value on the date of distribution.
NRS 164.021 Notice by trustee to beneficiary concerning change of revocable trust to irrevocable trust; contents of notice; limitation of action to contest validity of trust.
NRS 164.025 Notice of death of settlor; filing of claim against trust estate; effect of failure to file claim; notice to Department of Health and Human Services; notice of rejected claim; effect of failure to bring suit after notice of rejected claim.
For some of those strategies to be effective, action must be taken right away.
Fiduciaries, in particular, should be familiar with these strategies and deadlines.
POWER OVER PROPERTY NRS 164.067 Power to sell, convey or encumber. TRANSFER OF SUPERVISION OF TRUSTS NRS 164.130 Transfer by court to district court in this State or court outside Nevada. NRS 164.680 Uniformity of application and construction.
COMMON TRUST FUNDS (UNIFORM ACT) NRS 164.070 Short title. CERTIFICATIONS OF TRUST IN LIEU OF TRUST INSTRUMENTS NRS 164.400 Presentation; effect; form. NRS 164.420 Dispositive provisions not required; person presented with certification may request excerpts from trust instrument designating trustee. MANAGEMENT AND INVESTMENT OF PROPERTY General Provisions NRS 164.700 Definitions.
Also, if the trust is exempt from generation-skipping transfer (GST) taxes, the transfer tax savings from accumulating income in the trust may outweigh any income tax savings from distributions. Generally, estates and trusts are taxed on a calendar year basis, but estates may elect to be taxed on a fiscal year basis.Minimize the Medicare surtax Distribute to beneficiaries who are in low income tax brackets.This will allow the income to be taxed at the beneficiaries’ lower rates, rather than at the estate’s or trust’s rate, which is 39.6% once the ,950 threshold is reached. An estate or trust may elect to treat amounts paid or credited in the first 65 days of the tax year as if they were paid or credited on the last day of the prior tax year. Before making distributions to minimize income taxes, make sure to consider other factors.NRS 164.030 Petition for instructions: Notice; hearing; final order; appeal. NRS 164.665 Standard of conduct in managing and investing institutional fund.
NRS 164.033 Petition concerning conveyance, transfer or delivery of property of trust; notice of hearing; order; appeal. NRS 164.038 Circumstances under which certain persons are authorized to be represented by persons with similar interests in proceedings concerning administration of trust; binding results; representation by parent or guardian of beneficiary. NRS 164.667 Appropriation for expenditure or accumulation of endowment fund; rules of construction.
For estates and trusts, the surtax applies to the lesser of undistributed net investment income and the excess of AGI over the threshold for the highest income tax bracket (,950 in 2013).