What are the requirements for an arrangement to qualify as a “trust” under the Internal Revenue Code?
1. Definitions are found in Internal Revenue Code 7701.
2. Treasury Reg. 301.7701-4(a) defines a trust as for Internal Revenue Code purposes as:
“an arrangement created either by will or inter vivos declaration whereby trustees take title to property for the purpose of protecting and conserving it for the beneficiaries under the ordinary rules applied in chancery or probate courts . . . . Generally speaking, an arrangement will be treated as a trust under the Internal Revenue Code if it can be shown that the purpose of the arrangement is to vest in trustees responsibility for the protection and conservation of property for beneficiaries who cannot share in the discharge of this responsibility and, therefore, are not associates in a joint enterprise for the conduct of business for profit”
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