In some instances, trust law will offer only a starting point, after which courts must go on to ask whether, or to what extent, the language of the statute, its structure, or its purposes require departing from
common-law trust requirements.
Indeed, most are formed for a business purpose and some statutes expressly preclude a traditional common-law trust purpose.
A simple check-the-box extension to trusts would further advance both the spirit and scope of the check-the-box Regulations and would presume every common-law trust will be classified as an ordinary trust subject to taxation under Subchapter J.
Extensive early litigation focused on the federal tax classification of common-law trusts, such as the Massachusetts business trust, (9) as ordinary or business trusts.
The exclusion perpetuates the uncertain classification of common-law trusts as an ordinary or business trust in the first instance.
In a famous quote, Chief Justice Hughes revealed that the inclusion of associations with corporations in the same taxation group "implies resemblance; but it is resemblance and not identity." (69) As such, resemblance does not require statutory existence (allowing recognition of common-law trusts).
Because most common-law trusts are formed on the assumption that the trust will be classified as a trust and not as some other business entity inconsistent with the trust form, the ordinary trust classification assumption comports with the most normative default rule.
This would then permit common-law trusts to make a second election to be taxed like a corporation--the same elective right accorded other unincorporated business entities.
Other legal structures are superior vehicles for succession planning, such as legal structures involving common-law trusts.
Common-law trusts can be administered according to the wishes of the founders.
However, common-law trusts are often unviable for GCC family owned businesses.
