Wills and Trusts

Wyatt, Tarrant & Combs, LLP

Trust Claiming §642(c) Income Tax Deduction and the “Pursuant To” Requirement

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PLR 201225004 involved a trust claiming the §642(c) deduction for income distributed to charity.  The issue was the §642(c)(1) requirement that the income be distributed “pursuant to the terms of the governing instrument”

Where the distribution was directed by a beneficiary’s exercise of a lifetime special power of appointment the IRS determined that satisfied the “pursuant to” requirement even though the governing instrument did not specify a charitable bequest.  It only authorized exercise of the power in favor of charity.  This situation may become more common where efforts are made to avoid the 3.8% tax.

Turney P. Berry
Louisville, Kentucky

Author: robmalinesq

I am an estate planning and probate attorney in Memphis, Tennessee.

Leave a reply. Please note that although this blog may be helpful in informing clients and others who have an interest in information privacy and security, it is not intended to be legal advice. The information on this blog also should not be relied upon to form an attorney-client relationship.

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