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:
“But the tax collector, standing far off, would not even look up to heaven, but was beating his breast and saying, ‘God, be merciful to me, a sinner!’”
—Bible: New Testament, Luke 18:13.
“Nothing can be more real, or concern us more, than our own sentiments of pleasure and uneasiness; and if these be favourable to virtue and unfavourable to vice, no more can be requisite to the regulation of our conduct and behavior.”
—David Hume (1711–1776)