Disputed ownership funds liquidating trust
Preference targets are creditors such as trade creditors who did business on an unsecured basis with a troubled company that ultimately filed for bankruptcy.The look-back period is generally 90 days from the petition date for noninsider creditors and one year for insiders.All too often IRA owners commit costly mistakes on their beneficiary form that may leave loved ones out in the cold despite the best intentions.From failing to update their document after a divorce, to forgetting to name a beneficiary, such financial fumbles can force future generations to surrender too much to Uncle Sam — or worse, deny them their rightful inheritance.The proposed regulations provide rules for taxing income earned by (1) qualified escrow accounts and qualified trusts used in deferred like-kind exchanges under section 1031, (2) pre-closing escrows used in sales or exchanges of real or personal property, (3) contingent-at-closing escrows established on account of contingencies existing at the closing of certain sales of business or investment property, and (4) disputed ownership funds established under the jurisdiction of a court to hold money or property subject to disputed claims of ownership.Additionally, the proposed regulations provide rules permitting a transferor to a QSF to elect taxation of the QSF as a grantor trust.Be a trusted advisor to your clients with Bloomberg BNA Tax Portfolios.
Such assets may consist of securities that are illiquid or have certain restrictions or monies held in escrow where it will take several years for the conditions to be met for release of such funds.
While the preference provisions under the Bankruptcy Code are intended to...
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A liquidating trust may also be an effective method for a fund manager to wind down a fund without having a significant role in the liquidation.
At the end of the fund's life cycle or term, the fund manager may have certain assets that are not easily liquidated and convertible into cash for distribution to the owners of the fund.