Information reporting on transactions with foreign trusts and large foreign gifts, transactions with foreign trusts
Potentially relevant for tax-exempt organizations that control foreign trusts used for fundraising abroad
The U.S. Treasury Department and IRS last week released proposed regulations (REG-124850-08) that would provide guidance under sections 643(i), 679, 6039F, 6048, and 6677 regarding information reporting on transactions with foreign trusts and receipt of large foreign gifts and regarding loans from, and uses of property of, foreign trusts, and amend the regulations relating to foreign trusts having one or more U.S. beneficiaries.
These regulations are potentially relevant for tax-exempt organizations that control foreign trusts used for fundraising abroad so that donors may be eligible for a tax deduction in their home country.
The proposed regulations are proposed to apply to transactions with foreign trusts and the receipt of foreign gifts in tax years beginning after the date on which the final regulations are published in the Federal Register. However, a taxpayer may rely on the proposed regulations for any tax year ending after May 8, 2024, and beginning on or before the date that final regulations are published in the Federal Register, provided that the taxpayer and all related persons (within the meaning of sections 267(b) and 707(b)(1)) apply the proposed regulations in their entirety and in a consistent manner for all tax years beginning with the first tax year of reliance until the applicability date of the final regulations.
The proposed regulations generally incorporate, with some modifications and additions, rules set forth in earlier guidance, including Notice 97-34, Rev. Proc. 2015-55, and Rev. Proc. 2020-17.
Comments on the proposed regulations, as well as requests to speak and outlines for topics to be discussed at a public hearing (scheduled for August 21, 2024, at 10:00 AM ET), are due by July 8, 2024. If no outlines are received by that date, the public hearing will be cancelled.
For more information, contact your usual KPMG tax professional or one of the following Washington National Tax professionals:
Ruth Madrigal | ruthmadrigal@kpmg.com
Preston Quesenberry | pquesenberry@kpmg.com