TAX-PLANNING CLIENT LETTER ON IRREVOCABLE TRUSTS , GIFT TAX , AND ESTATE TAX
Suppose you are a CPA , and your client has requested advice regarding establishing an irrevocable trust for his two ( 2 ) grandchildren . He wants the income from the trust paid to the children for 20 years and the principal distributed to the children at the end of 20 years .
Use the Internet and Strayer databases to research the rules regarding irrevocable trusts , gift tax , and estate tax . Be sure to use the six ( 6 ) step tax research process in Chapter 1 and demonstrated in Appendix A of your textbook as a guide for your written response .
Write a one to two ( 1-2 ) page letter in which you :
Analyze the effect of an irrevocable trust on the gift tax and future estate taxes .
Suggest other significant alternatives that the client could use both to reduce estate tax and to maximize potential advantages of the payment of gift taxes on transfers of property .
Use the six ( 6 ) step tax research process , located in Chapter 1 and demonstrated in Appendix A of the textbook , to record your research for communications to the client .
Your assignment must follow these formatting requirements :
Be typed , double spaced , using Times New Roman font ( size 12 ), with one-inch margins on all sides ; citations and references must follow APA or school-specific format . Check with your professor for any additional instructions .
Include a cover page containing the title of the assignment , the student ’ s name , the professor ’ s name , the course title , and the date .