Gun Trusts Count As “Trusts” For Federal Tax Purposes

Saturday, January 9, 2016

Gun Trusts Count As Trusts For Federal Tax Purposes

Gun safe 2The Internal Revenue Service (IRS) has recently released Information Letter 2015-0039, which deals with gun trusts. A gun trust is a legal trust that people can use to register firearms with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). According to the Information Letter a gun trust is still considered a trust for tax purposes under Treasury Regulation Section 301.7701-4 even if there are no ascertainable beneficiaries. In this situation the IRS looked at a sample gun trust agreement that created a non-charitable purpose trust that did not identify any ascertainable beneficiaries. The IRS concluded that the grantor qualified as a beneficiary. Just because a person was not identified as a beneficiary in a trust does not mean that they are not one for tax purposes according to the IRS. The IRS has cautioned that its information letter ruling only applies to the provisions of the specific agreement and that a trust with different provisions might lead to a different conclusion.

See Dawn S. Markowitz, Gun Trust is a Trust for Federal Tax Purposes, Wealth Management, January 8, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.

Estate Planning – Generally, Estate Tax, Income Tax, Trusts | Permalink

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