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:
“...many tax collectors and sinners were also sitting with Jesus.”
—Bible: New Testament, Mark 2:15.
“Nothing changes my twenty-six years in the military. I continue to love it and everything it stands for and everything I was able to accomplish in it. To put up a wall against the military because of one regulation would be doing the same thing that the regulation does in terms of negating people.”
—Margarethe Cammermeyer (b. 1942)