January 25, 2017
Opinion No. 2017-01
Synopsis: For purposes of K.S.A. 25-4153a, a campaign contribution from a revocable living trust is treated as if made directly by the grantor when contributed during the life of the grantor.
Cited herein: K.S.A. 2015 Supp. 25-4153a.
TO ALL INTERESTED PERSONS:
Pursuant to K.S.A. 25-4159, the Kansas Governmental Ethics Commission issues this opinion regarding campaign contributions to legislators, candidates for the legislature, statewide elected officers or candidates for statewide office, and recognized political committees for the senate or house of representatives, made subsequent to January 1, through adjournment, sine die, or any other time the legislature is in session.
FACTUAL STATEMENT
Commonly called an inter vivos trust or living trust, one may be set up by an individual during his or her life for a variety of legal, tax, or estate planning reasons. Such trusts, when revocable, allow the grantor to retain complete control over trust assets. Trust assets are used by the grantor as if their own. Trust income is reported under the grantor’s social security number, not a distinct tax identification number assigned to the trust.
ANALYSIS AND OPINION
Because the grantor can amend or revoke a revocable trust and the grantor’s initial transfer of assets does not alienate those assets from the grantor’s control, courts have held the assets are treated as if owned by the grantor for tax liability purposes. See Harry G. McNeely v. U.S., 16 F.3d 303 (8th Cir. 1994), and Estate of Kisling v. Commissioner, 32 F3rd 1222 (8th Cir. 1994). These holdings are now law, as codified by The 1997 Taxpayer Relief Act. We adopt this position expressed by the courts and tax code that disbursements from revocable living trusts during the grantor’s life are considered as if made by the grantor.
CONCLUSION
We opine a campaign contribution to a legislator, candidate for the legislature, statewide elected officer or candidate for statewide office or a recognized political committee for the senate or house of representatives may be accepted from a revocable living trust as if the contribution was made by individual if the trust grantor is living when the contribution is made.
Sincerely,
G. Daniel Harden, Chairman
By Direction of the Commission
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