Grantor Trust Rules

  

Categories: Trusts and Estates

Some trusts require you to give up control of your assets. You hand them over to the trust...now the assets are owned by the trust and controlled by the trustees.

A grantor trust works differently. The person granting assets to the trust (known as the “grantor”) keeps control of the assets. Because of this structure, the tax rules for these trusts are different...these regulations are called the grantor trust rules.

Generally, the IRS taxes these assets as if they belonged to the grantor (meaning they use that person’s individual tax rate rather than the rate that would apply if the trust held the asset outright).

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Finance: What is a trust deed?3 Views

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Finance allah shmoop What is a trust deed here This

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is okay So that's more of a trust fall A

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trust deed is a kind of how to build it

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kitt which instead of describing the construction of ah balsa

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wood airplane describes how assets should be owned cared for

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managed and eventually disposed of two the beneficiary or whoever

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bought him in the first place or who were involved

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in the model airplane build from the beginning What does

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that mean Well a trustee lays out the rights and

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obligations of the bank underwriting the purchase of whatever inventory

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is involved here In this trust deed it lays out

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the rights of the people transacting and it spells out

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who gets called defend or when there is a conflict

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And this is particularly useful in a world where there

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is indeed not a lot of trust Essentially a business

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owner is just holding merchandise that was bought by the

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bank like eighteen miles of denim fabric with intentional rips

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and tears in it You know those things as the

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business owner stitches together hundreds than thousands of sets of

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genes which they then sell into the fashion market places

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In new york and milan the bank via their trust

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deed owns that merchandise until the business owner essentially buys

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them out of it or pays back the loan amount

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committed when the merge was initially bought The trusty it'sjust

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the legal documentation that outlines the various obligations of both

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parties i'ii think of it as a contract light Why

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would you want one of these arrangements If you're a

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business owner Like why bother with all this trust deed

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stuff and inventory and banks Well if you didn't have

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tohave one well you wouldn't But if you're a fledgling

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company hoping to make it big in the big city

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and you need lots of inventory to make lots of

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genes or nobody takes you seriously well then you do

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what you have to dio and you can imagine that

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banks charge very high interest for setting up the's trust

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deeds because the credit risk they take here is usually

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reasonably very high like the levi stitching company just vanishes

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one night or was in fact a meth lab using

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the denim as a mano a filtration process and the

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mexican mafia comes in one night ending and this little

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companies Entrepreneurial activities Well another reason banks charge high interest

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is because the last thing they want tohave to dio

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is repossess eighteen miles of denim and then try to

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get their money back by selling that eighteen miles of

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denim on ebay So as a result not only do

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trusted borrowers pay high interest but they also have to

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carry relatively expensive insurance on that inventory So that at

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left high and dry Or at least you know just 00:02:44.81 --> [endTime] dry

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