Tax Tid-Bits

Ranch Qualifies as Personal Residence for QPRT

The IRS recently ruled that a qualified personal residence trust (QPRT) may include a residence, a garage, a caretaker’s residence, and the surrounding land. The residence is a vacation home (known as the "Ranch") owned by a husband and wife as tenants in common. The land serves no business purpose, and the owners receive no rent from any guests, who generally only occupy the residence while the owners are there. The couple plan to create two identical QPRTs—one for the husband’s share of the Ranch and one for the wife’s.

The IRS noted that a qualified personal residence, under §2702, may include appurtenant structures used for residential purposes and adjacent land not in excess of that appropriate for residential purposes (taking into account the residence’s size and location).