A new revenue procedure issued by the Internal Revenue Service (IRS) on November 14 allows American Indian tribes to establish trusts for minors or legally incompetent tribal members for the distribution of gambling revenues under the Indian Gaming Regulatory Act (IGRA), reported Accounting Today.
The new measure, Revenue Procedure 2011-56, supersedes Rev. Proc. 2003-14, and does not require beneficiaries of an IGRA trust to include amounts in gross income under the economic benefit doctrine when transferred to, or earned by, the IGRA trust. Still, they "must include trust distributions in income when actually or constructively received," stated Accounting Today.
If all provisions are met, an Indian tribe is considered the grantor and owner of the trust. Thus, the trust beneficiary is not taxed on distributions to the trust or income earned by the trust until they are actually or constructively received.
For more information, continue reading "IRS Modifies Rules for Indian Gaming Revenues."