Rubin on Tax: USE OF QPRT ALLOWS SALE OF REMAINDER.
A recent private letter ruling effectively allows the old rules to
operate in context of the transfer of a personal residence to a
qualified personal residence trust (QPRT). Due to the special exception
from the operation of Section 2702 to qualified personal residences,
the IRS has confirmed that a simultaneous sale of the remainder
interest in the residence with the transfer of the residence to a QPRT
will not run afoul of Section 2702.
Interesting new twist as now you can, according to Rubin's article, have a QPRT based on a life use rather than a term of years. Also, there would no longer be a taxable gift upon the initial transfer of the property. Rubin does warn that there would be income tax implications on the sale of the remainder interest, but it does sound like a good estate planning device just got a little better for some clients.
