Are Form 3520 Non 2023-2024

Music. I'm David Warren, co-founder of Bridgeford Trust Company. In light of recent changes to the federal tax code, state tax planning has become incredibly important, and perhaps more important now than ever. There are at least two strategies that revolve around trust planning. They are very important to understand and actually have the potential to result in very compelling tax savings. The first strategy we're going to discuss is the Inga strategy, or the incomplete non-grantor trusts. The incomplete non-grantor trust concept has been around for several years, but over the last five or six years, it has become a hot topic, particularly for residents of high state income tax states like California and New Jersey. The Inga concept is particularly compelling for residents in high-income tax states that have assets with very low cost basis. For example, someone who started a business thirty or forty years ago and has closely held stock, or someone who bought into a portfolio several decades ago that has appreciated significantly in terms of capital gains. Any low cost basis asset can greatly benefit from the Inga strategy. Essentially, it works as an incomplete gift, which means the gift to the trust itself is not subject to gift tax, which is very important. The trust itself is treated as a non-grantor status, which means taxation occurs at the trust level and not the individual level. This is significant because if taxation is going to happen at the trust level, by simply placing the trust in a jurisdiction like South Dakota that does not have state income tax, there's an ability to potentially save a tremendous amount of money in capital gains tax. Bridgeford Trust Company was involved in the very first private letter ruling issued by the IRS on the Inga strategy relative to a South Dakota...