Abstract
This article seeks to describe some of the salient practical and policy issues confronting the foreign deferred compensatory trust world in light of the recent changes to the Code and the more recently issued proposed regulations. Part II first outlines some of the basic U.S. federal income tax considerations involved in trust-structured foreign deferred compensatory arrangements. Part II describes the conditions necessary for grantor trust treatment as well as the tax consequences associated with section402(b) secular trust arrangements. Part II further discusses the recent changes in law refining the boundary between domestic and foreign trusts. Part III highlights "inbound" foreign grantor trusts, and discusses the recent proposed changes to section 672, and the potential consequences to foreign compensatory arrangements occasioned by the "overfunding" rules discussed above. Part III also examines changes with respect to the apparent demarcation between section 402(b) trusts and grantor trusts and further explores several potentially key consequences for rabbi trusts. Finally, Part IV examines "outbound" foreign grantor trusts including the recent effects of the changes in law on those arrangements.
Recommended Citation
Steven W. Rabitz,
An Overview Concerning Certain Recent Changes for Foreign Compensatory Trusts: 402(b)Trusts, Grantor Trusts and "Rabbi" Trusts,
4 Fla. Tax Rev.
(2001).
Available at: https://scholarship.law.ufl.edu/ftr/vol4/iss1/9