Trusts' Material Participation: Useful Guidance From ABAMay 20, 2015 – Article
Since inception of the Treasury regulations issued under Internal Revenue Code Section 469, Section 1.469-8 regarding the material participation of trusts has been reserved, offering no official guidance on if, when or how a trust would materially participate in a trade or business sufficient to categorize the trust’s income as active. With only two cases of note on this issue, several inconsistent technical advice memoranda, and increased focus on the material participation test as a result of the adoption of the net investment income (NII) tax under Internal Revenue Code Section 1411, the American Bar Association Tax Section issued a report earlier this year with recommendations to the commissioner of the Internal Revenue Service to adopt guidance under Treas. Reg. §1.469-8 for when a trust or estate can materially participate.
To view full article, click here (subscription required)