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The Accidentally Perfect Non-grantor Trust

Much has been written about the intentionally defective grantor trust (IDGT). Transfers to an IDGT are completed gifts for gift tax purposes; and the IDGT is not included in the grantor's estate for estate tax purposes. The IDGT is treated as a grantor trust for income tax purposes; and the grantor's payment of the income tax on the trust's income is not treated as an additional taxable gift by the

Much has been written about the intentionally defective grantor trust (IDGT). Transfers to an IDGT are completed gifts for gift tax purposes; and the IDGT is not included in the grantor's estate for estate tax purposes. The IDGT is treated as a grantor trust for income tax purposes; and the grantor's payment of the income tax on the trust's income is not treated as an additional taxable gift by the donor.1

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