Ref; Sec 2702 and Reg 25.2702
QPRT are often used to remove a primary residence from a large estate as well as asset protection. The rules for establishing are complex and care should be taken to engage an attorney well-versed in their formation. QPRT are typically more “flexible” that often thought including:
- The residence can be sold within the QPRT as long as those proceeds are reinvested in a qualifying residence within time frames established under Regs Sec 25-2702.
- QPRT usually qualifies as a grantor trust under IRC Sec 677 and 673. Therefore, the grantor may exclude up to $250k ($500k for married filing jointly) if the requirements of Section 121 are otherwise met.
We can discuss this at length as well as provide referrals to Martindale A-rated attorneys to help in establishing such a trust if it meets your tax needs.
