Qualified personal residence trusts, better known as QPRTs, effectively freeze the value of a real estate property for tax purposes. The homeowner puts the primary residence or vacation home in the trust and retains ownership for however many years they choose. When the trust ends, the property is transferred out of the taxable estate. The estate only has to pay gift tax on the value of the property when the trust was formed even if the home has appreciated by millions in value.
Plenty of affluent taxpayers deduct charitable donations from their taxable income, but the ultra-rich can parlay their philanthropy into guaranteed income for life. These trusts can be funded with a wide range of assets, from yachts to closely held businesses, making them particularly useful forUnlike QPRTs and CRTs, this technique is highly scrutinized by the IRS and comes with a lot of hoops to jump through.
Source: News Formal (newsformal.com)
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