WHAT ARE THE TAX CONSEQUENCES OF THE OFFSHORE TRUST AND LLC COMBINATION?
The entire structure is tax neutral. “Tax neutral” means that your income, estate, and gift tax “picture” does not change as a result of establishing this structure. The offshore trust does include the marital deduction and unified credit provisions necessary to obtain the maximum estate tax savings on death for married persons. The LLC will elect under IRS rules to be “disregarded” as an entity for U.S. tax purposes. This means it will not file a U.S. tax return and that all of its income and transactions will be reported on the trust’s information tax return. Income tax is only paid on your personal tax return – on the same items you would have paid tax on without the LLC/trust structure.
