Home > Regions > North America > “TAX TIPS: Trust ownership can raise issues,” Carl Grassi for Crain’s Cleveland Business

“TAX TIPS: Trust ownership can raise issues,” Carl Grassi for Crain’s Cleveland Business

Holding the equity of a closely held business in a trust can help meet many different estate and succession planning goals.

In fact, many estate plans of business owners utilize trusts in some way.

Such ownership can raise interesting tax issues, such as when a trust is considered to “materially participate” in the business. This issue has existed for some time, but mainly applied to businesses that were generating losses, because material participation allows a shareholder to deduct losses passed through by the business.