Legal Protection & Tax Mitigation

Platinum’s Trusts utilize a one-of-a-kind registered copyrighted trust. It is able to legally, per the IRS trust tax code, defer taxes in perpetuity on both business and personal tax liability. Our Trust defers and minimizes income and estate taxes to the fullest extent the IRS allows; in most cases between 78% to 97% or more.

Platinum Trusts vs Revocable Living Trusts

Unlike the Platinum Vault Trust, corporations, entities and Revocable Living Trusts are statutory and subject to legislative control and taxation. Income in a corporation or entity is taxable in the year it is earned. Likewise, income earned by endowments to a Revocable Living Trust (the most common type of Trust that many people have) are also taxable in the year they are earned. But income earned in a Platinum Vault Trust is not necessarily taxed in the year that it is earned, provided it did not distribute to any beneficiary in that tax year (other than cash distributions provided under Crummey provisions).

Note- Platinum Trusts have the ability to incorporate an existing Revocable Living Trust direction into it’s Trust.

Is the Platinum Trust legal or tax evasion?

If anything, it is a legitimate tax avoidance strategy.Pursuant to Narragansett Mut. F. Ins. Co. v. Burnhamun 51 r1371, 154 a 909, It is not an evasion of legal responsibility to take what advantage may accrue from the choice of any particular form of organization permitted by law.

Capital Gains Treatment Using Platinum Trusts

The courts ruled that a Spendthrift Trust Organization is not illegal even if formed for the express purpose of reducing or deferring taxes.

In Weeks v. Sibley DC 269, 155, Edwards V. Commissioner. 415121532 10th Circ. (1969) & Phillips v. Blanchard 37 Mass 510

The IRS law says “There has to be a possibility for an end of the Trust for there to be a possibility of tax.”  The Specialized Trust is set up for 21 year renewal option (this can be done generationally until the last of the heirs of the beneficiaries decease).

Internal Revenue TITLE 26, Subtitle A, CHAPTER 1, Subchapter J, PART I, Subpart A, Sec 643 (a)(3),(4),(7) and (b) states: “(3) Capital gains and losses. Gains from the sale or exchange of capital assets shall be excluded to the extent that such gains are allocated to corpus and are not (A) paid, credited, or required to be distributed to any beneficiary during the taxable year, or (B) paid, permanently set aside, or to be used for the purposes specified in section 642(c). Losses from the sale or exchange of capital assets shall be excluded, except to the extent such losses are taken into account in determining the amount of gains from the sale or exchange of capital assets which are paid, credited, or required to be distributed to any beneficiary during the taxable year. The exclusion under section 1202 shall not be taken into account. (4) Extraordinary dividends and taxable stock dividends for purposes only of subpart B (relating to trusts which distribute current income only), there shall be excluded those items of gross income constituting extraordinary dividends or taxable stock dividends which the fiduciary, acting in good faith, does not pay or credit to any beneficiary by reason of his determination that such dividends are allocable to corpus under the terms of the governing instrument and applicable local law. (7) Abusive transactions The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this part, including regulations to prevent avoidance of such purposes. If the estate or trust is allowed a deduction under section 642(c), the amount of the modifications specified in paragraphs (5) and (6) shall be reduced to the extent that the amount of income which is paid, permanently set aside, or to be used for the purposes specified in section 642(c) is deemed to consist of items specified in those paragraphs. For this purpose, such amount shall (in the absence of specific provisions in the governing instrument) be deemed to consist of the same proportion of each class of items of income of the estate or trust as the total of each class bears to the total of all classes. (b) Income for purposes of this subpart and subparts B, C, and D, the term “income”, when not preceded by the words “taxable”, “distributable net”, “undistributed net” or “gross”, means the amount of income of the estate or trust for the taxable year determined under the terms of the governing instrument and applicable local law.

Items of gross income constituting extraordinary dividends or taxable stock dividends which the fiduciary, acting in good faith, determines to be allocable to corpus under the terms of the governing instrument and applicable local law shall not be considered income.”

Passive Income Treatment

The Platinum Vault Trust helps to mitigate taxes on passive income. When a properly constructed Platinum Trust earns passive income, if that income is added to the corpus of the Trust and declared by the Trustee as “Extraordinary Dividends”, the income is then reported on a 1041 Tax Return in the year it was earned. But, pursuant to Section 643 of the Internal Revenue Code, any taxes that might otherwise be due on that tax year are instead deferred in perpetuity.

Edison California Stores, Inc. vs McColgan. 30 Cal 26472.183 P2d 16. ruled that persons may adopt any lawful means for the lessening of the burden of income taxes. In The Department of the Treasury, IRS Handbook for Special Agents § 412, Tax Avoidance Distinguished from Evasion, it states; “Avoidance of Taxes is not a criminal offense.  Any attempt to reduce, avoid, minimize, or alleviate taxes by legitimate means is permissible.

In Weeks v. Sibley DC 269£, 155, Edwards V. Commissioner. 41512£!, 532 10th Cir. (1969) and Philips v. Blanchard 37 Mass 510, the courts ruled that a Spendthrift Trust Organization is not illegal even if formed for the express purpose of reducing or deferring taxes.

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