Using a charitable lead annuity trust, donors can transfer significant assets to charities and heirs, and in doing so can "zero out" gift and estate taxes.

In 2010, Congress enacted the Health Care and Education Reconciliation Act of 2010 creating new IRC § 1411, which imposes a 3.8% surtax on the net investment income of individuals, estates, and trusts. In December 2012, the IRS issued proposed regulations that included a method (the Simplified Method) for charitable remainder trust (CRT) trustees to capture and report net investment income to the trust’s non-charitable income beneficiaries. Final regulations issued in December 2013 took a different approach, but in new proposed regulations issued at the same time, the Simplified Method was retained as an alternative election.

The Simplified Method works as a complement to the pre-existing “four-tier” structure used by CRTs for income tax reporting. Under the Simplified Method, all net investment income (NII) received after December 31, 2012 is aggregated on a cumulative basis and distributed before excluded income. A trustee should consider electing the simplified method when the trust’s income beneficiaries do not meet the applicable modified adjusted gross income threshold or when the trust has realized or realizable capital losses coupled with a short expected remaining term.

In PLR 201724007, the Service ruled the splitting of gifts to an irrevocable trust, in which the settlor's spouse was a discretionary beneficiary, and the allocation of the spouse's GST exemption to the indirect skip, though incorrect, would be permitted to stand because the limitations period for assessing gift tax had expired.

In PLR 201724001, the Service modified an earlier letter ruling concerning proposed grants by a private nonoperating foundation to POF with which it had some directors in common, adding a requirement that the granting foundation exercise expenditure responsibility.