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Can you borrow from your trust fund for your own benefit?
Dad grants son $10 million in trust fund. Son is a sick gambler.
Son loses $28 M in stock market, fulltilt and Bellagio. Father funds another $20 M to the trust. Son squanders more $$$, but withdraws these amount as loans with a promissory demand note due back to dad. Wouldn't these withrawals be construed as income by the IRS? This has been going on for thirty years. Son never paid back a dollar, even though there are demand notes for all these "loans." Interest income/expense has not been recognized on any tax return, either for the 1040 or 1041. Any attorneys, CPA with an opinion? No this isn't me, I should be so lucky. Nineinchal CPA |
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