|
Washington Report
October
2008
Dollar limit on qualified funeral trust is repealed
by ICCFA General Counsel Robert M. Fells, Esq.
President Bush recently signed into law
H.R. 6580, known as the Hubbard Act.
Although the law's main purpose is to pro-
vide veterans’ benefits to members of the Armed
Forces who are discharged early from the service
because they are the sole surviving support of
their family (only about 20 individuals annually
are expected to benefit from this law), the expen-
ses incurred under the law will be defrayed by
the additional revenue to the U.S. Treasury from
repeal of the dollar limits on Qualified Funeral
Trusts (QFTs).
The QFT election gives the trustee of a pre-
need funeral trust the option to pay the tax on
trust earnings in lieu of the owner of the funds
paying the tax, i.e., the customer. However, QFTs
had a dollar limit, currently $9,000. Beyond that
amount, the election could not be made for more
expensive contracts and the customer was res-
ponsible for the tax. The repeal contained in H.R.
6580, section 9, means that trustees may opt for
QFT treatment regardless of the dollar amount.
The effective date for the repeal of the dollar limit
is "taxable years beginning after the date of the
enactment of this act." This has been interpreted
to mean for taxable years beginning in 2009.
Copyright ICCFA 2008
|
