Foreign Grantor Trust Sample Clauses
A Foreign Grantor Trust clause defines the trust as one established outside the United States, where the grantor retains certain powers or interests that cause the trust's income to be taxed to the grantor rather than the trust or its beneficiaries. This clause typically specifies the criteria under which the trust qualifies as a foreign grantor trust, such as the grantor's residency status and the nature of their retained powers. Its core function is to clarify the tax treatment of the trust's income, ensuring compliance with U.S. tax laws and allocating tax responsibility appropriately.
POPULAR SAMPLE Copied 9 times
Foreign Grantor Trust. The parties hereto intend that this Trust be classified as a "grantor trust" for United States federal income tax purposes under Subpart E of Subchapter J of the Code pursuant to which the Trustor shall be the owner of the Trust for United States federal income tax purposes, and the Trustor will include directly in its gross income any income, gain, deduction or loss of the Trust as if the Trust did not exist. At all times during the term of the Trust, the Trustor and the Trustee intend that this Trust be treated as a foreign trust under Code Sec. 7701(a)(30) and 7701(a)(31). By the acceptance of the Trust, neither the Trustee nor the Trustor shall take any position for United States federal income tax purposes which is contrary to the classification of the Trust as a foreign grantor trust.