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Aragona Trust: Avoiding The 3.8-Percent Net Investment Income Tax For Trusts With An Active Trustee

Journal of Passthrough Entities

For our clients’ businesses in the partnership format, the interplay of income tax planning and estate planning will continue to present sophisticated challenges. This is particularly demonstrated by questions regarding the 3.8-percent tax on net investment income under Code Sec. 1411 (c), and whether material participation by the trustees avoids passive income for a trust that receives trade or business income from an operating partnership.

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