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Qualified Personal Residence Trusts A Qualified Personal Residence Trust (QPRT) is a technique that enables a donor to remove a residence from the donors estate at a reduced transfer tax cost, while.

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Related content

Part III - IRS
This revenue procedure contains an annotated sample declaration of trust and ... a QPRT...
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26 CFR § 25.2702-5 - Personal residence trusts....
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2017 Publication 523 - IRS
Jan 30, 2018 — See Report as ordinary income on Form 1040 appli- ... that is your...
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With a QPRT, you retain the right to live in the property for the term of the trust without paying rent. At the end of the term, your named beneficiary takes ownership of the property. If you die before the term of the trust expires, the value of the house would be included in your estate for estate tax purposes.

The trust beneficiaries (usually, the grantor's children) receive the residence outright or in a future trust for asset protection purposes. If you wish to continue living in the home, you can rent it at fair market value from the trust.

The biggest benefit of a QPRT is that it removes the value of your primary or second home and its appreciation from your taxable estate. Continued use of the property. With your home in a QPRT, you can still live in the property rent-free and enjoy any income tax deductions associated with it.

A qualified personal residence trust (QPRT) is a great tool if you are planning your estate and realize that your primary or other residence significantly impacts the total value of your estate. Estate taxes, including gift taxes, are assessed using the total value of your estate.

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).

One of the main disadvantages of a QPRT is the loss of stepped-up basis. When you own real estate and you pass it to a beneficiary through your Will, your beneficiary receives it with an income tax basis equal to the fair market value of the house at the time of death.

Possible Downsides of QPRTs In some states, holding a personal residence in a QPRT can result in reassessment of property tax liability and higher property taxes or a loss of certain property tax exemptions or abatements.

A: For starters, you must appoint a trustee to manage the QPRT. Frequently, a grantor will act as the trustee. Alternatively, it can be another family member, friend or professional.

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© Copyright 1997-2025
airSlate Legal Forms, Inc.
3720 Flowood Dr, Flowood, Mississippi 39232
Form Packages
Adoption
Bankruptcy
Contractors
Divorce
Home Sales
Employment
Identity Theft
Incorporation
Landlord Tenant
Living Trust
Name Change
Personal Planning
Small Business
Wills & Estates
Packages A-Z
Form Categories
Affidavits
Bankruptcy
Bill of Sale
Corporate - LLC
Divorce
Employment
Identity Theft
Internet Technology
Landlord Tenant
Living Wills
Name Change
Power of Attorney
Real Estate
Small Estates
Wills
All Forms
Forms A-Z
Form Library
Customer Service
Terms of Service
DMCA Policy
About Us
Blog
Affiliates
Contact Us
Privacy Notice
Delete My Account
Site Map
All Forms
Search all Forms
Industries
Forms in Spanish
Localized Forms
Legal Guides
Real Estate Handbook
All Guides
Prepared for You
Notarize
Incorporation services
Our Customers
For Consumers
For Small Business
For Attorneys
Our Sites
US Legal Forms
USLegal
FormsPass
pdfFiller
signNow
airSlate workflows
DocHub
Instapage
Social Media
Call us now toll free:
1-877-389-0141
As seen in:
  • USA Today logo picture
  • CBC News logo picture
  • LA Times logo picture
  • The Washington Post logo picture
  • AP logo picture
  • Forbes logo picture
© Copyright 1997-2025
airSlate Legal Forms, Inc.
3720 Flowood Dr, Flowood, Mississippi 39232