IRS PLR: Qualified Replacement Property Transfers Won’t Be Dispositions (IRC §1042)

Transfers of qualified replacement property (QRP) to a grantor trust and, pursuant to Trust’s terms, after Taxpayer’s death, will not constitute QRP dispositions (subject to gain recognition) under I.R.C. §1042(e), provided that Taxpayer is treated, respectively, as the owner of Trust and of the QRP under §671 through §677, the IRS ruled. Taxpayer had sold shares of a company to an Employee Stock Ownership Plan (ESOP) maintained by that company and reinvested the proceeds into QRP within the replacement period of §1042(c)(3). [PLR 202206009]

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