IRS PLR: Qualified Settlement Trust’s Investment Income Excludible (IRC §115)

Investment income earned by a trust created to satisfy claims in a state’s legal action against a corporation will not be included in the trust’s gross income under tax code Section 115(1), which excludes income accruing to a state or political subdivision, the IRS ruled, also ruling that Trust is a qualified settlement fund under Treasury Regulations Section 1.468B-1(c). A state agency is the sole beneficiary of Trust, according to the factual background. When neither the corporation nor any of its affiliates is participating in Trust as administrator and is otherwise not benefiting from it more ...