Tax and Regulation
Trusts can be used to avoid taxes and regulation, although in the United States the IRS allows trusts to be taxed as corporations, partnerships, or not at all depending on the circumstances. Tax avoidance concerns have historically been one of the reasons that European countries have been reluctant to adopt trusts.
The trust-preferred security is a hybrid (debt and equity) security with favorable tax treatment which is treated as regulatory capital on banks' balance sheets. The Dodd-Frank Wall Street Reform and Consumer Protection Act changed this somewhat by not allowing these assets to be a part of (large) banks' regulatory capital.
Read more about this topic: Trust Law
Famous quotes containing the words tax and/or regulation:
“In other words, a democratic government is the only one in which those who vote for a tax can escape the obligation to pay it.”
—Alexis de Tocqueville (1805–1859)
“Lots of white people think black people are stupid. They are stupid themselves for thinking so, but regulation will not make them smarter.”
—Stephen Carter (b. 1954)