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Rich Californians May Lose Access to This Profitable Tax Loophole

Yahoo Finance
Summary
Nutrition label

83% Informative

California wants to crack down on a type of trust that lets the very wealthy avoid state income and federal gift taxes.

An incomplete non-grantor trust (ING) is a specialized form of trust designed to shift the tax base of its assets.

In 2014 , New York state banned the use of ING trusts to avoid state taxes.

California Gov. Gavin Newsom has proposed closing a tax loophole known as the incomplete non-grantor trust.

This is a structure used by the very wealthy to avoid paying state income taxes and federal gift taxes.

Grantors take three basic steps to set up an ING trust: Create a trust that is legally based in a state with no taxes on income and capital gains.

VR Score

83

Informative language

81

Neutral language

59

Article tone

informal

Language

English

Language complexity

42

Offensive language

not offensive

Hate speech

not hateful

Attention-grabbing headline

not detected

Known propaganda techniques

not detected

Time-value

medium-lived

External references

18

https://smartasset.com/estate-planning/gift-tax-explained-2021-exemption-and-rateshttps://smartasset.com/estate-planning/irrevocable-trusthttps://smartasset.com/bloghttps://smartasset.com/retirement/find-a-financial-planner?utm_source=syndication_yahoo&utm_medium=referral&utm_campaign=sma__falc_relevant&utm_content=ddstatesdependent2023https://smartasset.com/taxes/carried-interest-loopholehttps://codes.findlaw.com/ny/tax-law/tax-sect-612.htmlhttps://ebudget.ca.gov/2023-24/pdf/BudgetSummary/RevenueEstimates.pdfhttps://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202320240AB101https://smartasset.com/financial-advisor/grantor-trusthttps://smartasset.com/estate-planning/non-grantor-trusthttps://smartasset.com/financial-advisor/trust-definitionhttps://smartasset.com/retirement/find-a-financial-planner?utm_source=syndication_yahoo&utm_medium=referral&utm_campaign=sma__falc_relevant&utm_content=ingtrustchangeshttps://smartasset.com/blog/taxes/ing-trust-changes/https://dr5dymrsxhdzh.cloudfront.net/blog/images/aff10227c/2023/06/close-up-view-of-the-california-flag-waving.jpg_s1024x1024wisk20chp8ciDtFIt70rDo_GgHhnjISYo2GN33IZjm_i1Zaa5g.jpghttps://www.cbpp.org/research/state-budget-and-tax/states-should-follow-new-yorks-lead-and-shut-down-tax-avoiding-inghttps://dr5dymrsxhdzh.cloudfront.net/blog/images/aff10227c/2023/06/cash-flows-bypass-government-financial-regulators.jpg_s1024x1024wisk20cQ7TwDUf9STXIW-suEydCkitFINv4hJwylUDgUShjO5s.jpghttps://dr5dymrsxhdzh.cloudfront.net/blog/images/aff10227c/2023/06/family-at-the-airport.jpg_s1024x1024wisk20cqDDUYD2-aOkWpfxQg-5FUUf1TYiiOFO4t6pUn2PBlfA.jpghttps://smartasset.com/estate-planning/types-of-trusts

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