Rev. Rul. 2008-40, Foreign Trust Transfers
Rev. Rul. 2008-40 is an IRS ruling about transfers from certain qualified retirement plans to foreign trusts and Puerto Rico plans. It explains when a transfer is treated as a distribution and how the ruling relates to income inclusion under the cited Code provisions.
Document and scope
The Internal Revenue Service issued Rev. Rul. 2008-40 as guidance on transfers involving qualified retirement plans and foreign trusts. It addresses transfers to a nonqualified foreign trust, transfers to a Puerto Rico plan meeting specified requirements, and related income treatment. The ruling sets out two situations involving employer retirement plans and explains its conclusions through statutory provisions, analysis, holdings, and transition relief.[1]
Income and U.S. reporting context
For a U.S. citizen participant or beneficiary, the ruling says a distribution is includible in gross income to the extent applicable under sections 402 and 72. It describes section 402(a) as governing income inclusion in the taxable year of distribution from a qualified plan trust.[1]
Official text
The ruling appears in the Internal Revenue Bulletin, the authoritative instrument for publishing IRS rulings and procedures. Rev. Rul. 2008-40 can be viewed on the IRS website under the Internal Revenue Bulletins section. The citation for this ruling is Rev. Rul. 2008-40, 2008-30 I.R.B. 166.[1]
Related reading
This ruling concerns retirement plan transfers and how they are treated for income tax purposes. 26 U.S.C. § 6048, Foreign trust information covers foreign trust information reporting. 26 C.F.R. § 301.7701-7, Trusts addresses how federal rules define a foreign trust. Rev. Proc. 2014-55 and Canadian retirement plans addresses the treatment of those plans.
Questions and answers
Where can a reader find the official ruling?
The ruling is published in the Internal Revenue Bulletin. It is available on the IRS website under the Internal Revenue Bulletins section.[1]
Related resources
Related glossary terms
- Section 679: Section 679 addresses certain transfers by U.S. persons to foreign trusts. It treats some property transfers as ownership when the trust has a U.S. beneficiary.
- Foreign trust loan: Form 3520 filing rules address a loan received by an owner or beneficiary, or a related U.S. person, and outstanding qualified obligations from the trust.
- U.S. owner of a foreign trust: The Form 3520 instructions define a U.S. owner as a person treated as owning trust assets under grantor trust rules. Ownership can apply to part of a trust.
Related articles and guides
- Rev. Proc. 2020-17 and foreign trust reporting: Rev. Proc. 2020-17 covers its scope, trust definitions and eligibility conditions, and its link to U.S. reporting for certain foreign trusts and U.S. persons.
- Rev. Proc. 2014-55 and Canadian retirement plans: Rev. Proc. 2014-55 explains treaty-based tax deferral for certain Canadian retirement plans and describes related U.S. income and information reporting rules.
- When Trust Transfers Are Completed Gifts: How dominion and control, reserved powers, and retained use, enjoyment, or income relate to completed gifts and estate inclusion for a U.S. citizen's trust.
Tools and official documents
- Form 709: federal gift and GST tax return: Form 709 is the federal gift tax return, also used for generation-skipping transfers: reportable gifts, definitions, documents, related forms and filing.
Related pages
Sources and data notes
- U.S. Government, Transfer of amounts to a nonqualified foreign trust. https://www.irs.gov/pub/irs-irbs/irb08-30.pdf. Retrieved .
Dates in this block record when each source was read for this page.