Personal Residence Trust Sample With Tax
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How to fill out Personal Residence Trust?
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FAQ
A PRT is very limited and inflexible, because it must not hold any assets other than the residence and must not allow the sale of the residence. A QPRT can hold limited amounts of cash for expenses or improvements to the residence, and can allow the residence to be sold (but not to the grantor or the grantor's spouse).
There is no set limit on the term of a QPRT. Setting the term length is one of the most important aspects of the Trust. It should be set up such that it expires before you pass away. Otherwise, the property goes back into the estate and will be subject to estate taxes, including gift taxes.
A Qualified Personal Residence Trust (?QPRT?) is an irrevocable trust that holds either a Grantor's personal residence or occasional residence for a certain term, then distributes the property to named beneficiaries at the end of the term.
What happens at the end of the QPRT term? Once the QPRT terminates and the beneficiary becomes the owner of the property, the Grantor can pay rent in exchange for the use of the property.
To calculate this value, the program determines the value of the interest retained by the grantor (income interest plus reversion). It then subtracts the value of the grantor's retained interest from the principal placed into the trust. The result is the taxable portion of the QPRT.