Bob Keebler on The Renaissance of Income Tax Planning

Summary

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Podcast Summary: Bob Keebler on The Renaissance of Income Tax Planning

AICPA Personal Financial Planning (PFP) Episode | January 23, 2026
Host: Kerry Sinnett (AICPA & CIMA)
Guest: Robert (Bob) Keebler, CPA/PFS, MST, AEP (Distinguished Tax and Estate Planning Expert)

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Episode Overview

This episode delivers an in-depth look into the “renaissance” of income tax planning strategies, focusing particularly on the powerful role of non-grantor trusts under current U.S. tax law. Bob Keebler shares advancements brought by the “One Big Beautiful Bill Act (HR1),” the flexibility of trust structures, and practical strategies for maximizing client benefits, especially with recent elevated estate tax exemptions and ongoing phase-outs of income tax deductions.

The discussion emphasizes actionable, creative ways CPA financial planners can help clients lower taxes on income by leveraging new rules, deploying multiple trust vehicles, and shifting income among family members — all within legal guardrails.

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Key Discussion Points & Insights

1. The Shift from Estate to Income Tax Planning

[02:31] - [03:02]

• Trend: With the estate tax exemption now at $15 million per individual ($30 million for couples), estate tax situations are rare (only 1 out of 400 estates affected).
• Result: Far more planning energy is being directed at income tax minimization rather than estate tax management.

“Now that we have, at least through the end of the current administration, no estate tax, there’s going to be a renaissance with the use of non grantor trust for income tax purposes.”
— Bob Keebler [02:31]

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2. The Power of Non-Grantor Trusts for Income Shifting

[03:29] - [04:45]

• Phase-Outs & Opportunities: Higher income clients lose access to major deductions (SALT, Section 199A, etc.) when income exceeds statutory thresholds.
• Income Shifting Concept: By moving income off the personal Form 1040 (individual tax return) to Form 1041 (trust tax return), it’s possible to drop below phase-out zones and preserve deductions.

Example:
If $600K in income disqualifies a taxpayer from SALT deductions, shifting $100K into a trust for children/grandchildren brings the taxpayer back into the SALT deduction range.

“If I move $100,000 of that income over to a trust for my children and grandchildren, my income is now only $500,000, and I get my SALT deduction back.”
— Bob Keebler [03:29]

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3. Trust Structures: Completed vs. Incomplete Gift Trusts

[04:45] - [05:35]

• Completed Gift Trust: Property is out of the estate; trust files its own tax return.
• Incomplete Gift Trust: In some states, retains step-up in basis at death; trust still files separate return.
• State Law Is Key: Some states facilitate more flexible trust planning (e.g., Wyoming, Nevada, Alaska, South Dakota, Delaware).

“You can make those non grantor trusts…with a completed gift which would get that property out of your estate. Or in a handful of states we can create an incomplete gift trust.”
— Bob Keebler [04:45]

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4. Five Core Strategies for CPAs Using Non-Grantor Trusts

[05:55]

1. Shifting Income Across Generations: Allocate to children/grandchildren (watch out for the kiddie tax).
2. Expand the SALT Deduction: Use separate trusts to multiply the deduction across multiple tax filings.
3. Enhance Section 199A Deduction (QBI): Use trusts to maximize this deduction by keeping income below critical phase-out thresholds.
4. Stacking QSBS (Qualified Small Business Stock) Exemptions: Use multiple trusts to multiply the $10M exemption for eligible gains.
5. State Income Tax Reduction/Deferral: Relocate trust situs to low-tax states to defer/avoid high-state income taxes.

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5. Practical Example: Multi-Generational Income Shifting

[06:57] - [08:15]

• Scenario: Client with three children and nine adult grandchildren. All income eligible to be spread.
• Savings: If top-bracket grandparents (37%) shift income to children in the 12%-22% bracket, achieve a 15-25% tax arbitrage.
• Net savings: Potential to save $20,000 per $100,000 transferred.

"If somehow we average a 20% arbitrage and we do that, for every $100,000 we transfer, we save $20,000."
— Bob Keebler [07:55]

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6. Expanding the SALT Deduction With Multiple Trusts

[08:27]

• Double Dipping: Individuals and trusts can each claim the SALT deduction separately.
• Illustration:
  • Create a slant (spousal lifetime access non-grantor trust) for spouse.
  • Move enough property so the trust generates $100K of income.
  • Individual income drops from $600K to $500K; both parties claim SALT deductions (limit increases from $10K to $40K as a result).

"So if my wife and I were at $600,000 of income, I could create a trust...so now our income...is only $500,000. The trust has $100K. We get a SALT deduction in both places."
— Bob Keebler [08:27]

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7. Guardrails: Avoiding IRS Trust “Collapsing” Rules (Section 643F)

[09:55] - [10:38] | [13:55] - [14:47]

• What Not to Do:
  • Cannot create multiple “identical” trusts for the same beneficiary and expect separate tax treatment; the IRS will aggregate (“collapse”) these under IRC Section 643F.
• What Works:
  • Separate trusts for different children (and their “issue”) count as unique. Different grantors (e.g., grandparent and parent) can create trusts for the same beneficiary.
• Legal Drafting: Careful, professional trust drafting is essential.

"Keep them separate. And our lawyer friends will be responsible for that drafting to make sure that the drafting just has to be rather adroit to get there."
— Bob Keebler [10:41]

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8. Stacking Section 199A (QBI) Deductions

[10:51] - [13:19]

• Issue: Specified Service Trades or Businesses (SSTBs, like accountants or doctors) phase out for Section 199A below $395K income (married couples).
• Strategy: By shifting equity into separate trusts for children/grandchildren, income can be lowered below phase-outs across multiple taxpayers/trusts.
• Impact: Example with 15 family members—rather than $20K, deductions can reach ~$400K.

“Instead of getting $20,000 of the 199 cap a deduction, we were looking at closer to $400,000 of the deduction.”
— Bob Keebler [13:09]

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9. Identifying Ideal Clients for Non-Grantor Trust Planning

[15:17]

• Best Candidates:

  • High-income earners losing SALT or 199A deductions due to phase-outs
  • Families able to benefit from intergenerational income shifting (adult children/grandchildren in lower brackets)
  • Business owners with eligible QSBS gains
  • Residents of high state income tax states open to out-of-state trust situs

• Red Flags:

  • Simple financial profiles or clients who don’t face deduction phase-outs may be better off with simpler structures.

“I think you start with do you have anyone that can't get the SALT deduction? Is there a way to get income off of their return? Then you ask yourself, is there anybody that can't get 199 cap A?...”
— Bob Keebler [15:17]

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Notable Quotes

• “Congress is basically saying if your income's too high, we're going to take away your SALT deduction.”
  — Bob Keebler [03:29]

• “Now what doesn't work is if I had three children and I set up three trusts for three children...the government's going to collapse those, treat you like one trust. But if it's a trust for A and her issue, B and her issue, C and her issue, we're great.”
  — Bob Keebler [09:55]

• “If you’re a CPA financial planner, unfortunately financial planning falls into that bad group, you do not get your 199cap a deduction if you make more than...$395,000.”
  — Bob Keebler [11:13]

• “As long as you keep the income at the trust level below $197,000, the trust would also get a 20% QBI deduction. And that's very powerful.”
  — Bob Keebler [12:29]

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Key Takeaways for Financial Planners

• Non-grantor trusts are making a comeback—they can be essential tools for maximizing income tax deductions in today’s landscape.
• Smart structuring, including the use of multiple, properly-drafted trusts, can allow high-net-worth families to restore valuable deductions eliminated by income phase outs.
• Guardrails exist—professional trust drafting is crucial to prevent the IRS from combining trusts (Section 643F aggregation rules).
• Not every client is a fit. Focus on those with substantial income and complex, multi-generational family structures, or high state tax exposure.

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Essential Segments and Timestamps

• Intro to the Renaissance of Income Tax Planning: [00:00] – [02:31]
• Current Tax Landscape and Need for New Strategies: [02:31] – [04:45]
• Five Trust-Based Income Tax Strategies: [05:55] – [06:37]
• Income Shifting Mechanics and Trust Stacking: [06:57] – [09:55]
• Guardrails and Section 643F: [09:55] – [10:47], [13:55] – [14:47]
• Section 199A Trust Opportunities: [10:51] – [13:19]
• Identifying Ideal Clients: [15:17] – [16:26]

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This episode is a must-listen for financial professionals aiming to stay at the forefront of modern income tax planning, especially in light of sweeping legislative changes and the evolving use of non-grantor trusts.

Transcript

[A]

One of your longtime clients walks into your office asking you about the 40,000 SALT deduction and he says, what does this mean for me? Eyes wide open with hope. And you've just listened to this episode that explains how not only can you use it, but how you can stack it multiple times. You're thinking about the trust you can set up, the state income tax you can legally step aside from the QSBS shares you can maybe layer in. And how, thanks to the One Big Beautiful Bill Act HR1, you now have the tools to build a tax trifecta trust that could save your clients hundreds of thousands over time. This episode is your front row seat to the next renaissance in income tax planning. If you're a CPA financial planner who wants to be ready not just for what has changed, but for what's now possible, this is the conversation you don't want to miss. Welcome to the AICPA's Personal Financial Planning Podcast. This is Kerry Sinnett. On behalf of the AICPA Personal Financial Planning Division, the premier community for trusted financial planning expertise, we're happy to bring you thought leadership from experts in all aspects related to personal financial planning, including today's topic of non grantor trust opportunities. Be sure to Visit [e-mail] Pfp to find more resources and tools designed to help you deliver premier financial planning to your clients. So today's guest is Robert Keebler. You've probably heard of him. Bob is nationally recognized tax and estate planning expert and as a partner at Keebler and associates with 30 years of experience, he advises high net worth clients and professionals on advanced trust tax and retirement strategies. Bob, welcome to the podcast.

[B]

Great to be here, Carrie.

[A]

All right, let's dive right in. How should CPA financial planners be rethinking non grantor trust structures now that income tax planning is likely to be a strategic driving force for most clients? And then I want to ask you on particular types of of strategies. I have five of them that I think this might work for. So as you dive in first, will you talk about just income shifting and how that will work for non grantor trust?

[B]

Sure. The reality is one out of 400 estates will have an estate tax problem. A very small number, but it was a much larger number when the exemption was only $7 million and the possibility of sunset kept us all in the estate tax planning game. But now that we have, at least through the end of the current administration, no estate tax, there's going to be a renaissance with the use of non grantor trust for Income tax purposes.

[A]

No estate tax below 15 million.

[B]

Correct. Right. Under OBA. What's happening is there are many new limitations that are driven by phase outs. Carry like I make too much money, I don't get salt. If I make too much money, I don't get a senior deduction.

[A]

That's funny because in my house it's a different type of phase out. If I don't make enough money. There are certain deductions that happen in my household. So this goes the other way.

[B]

This goes the other way. Congress is basically saying if your income's too high, we're going to take away your SALT deduction. We might disallow some 199 cap A. So there'll be this renaissance of how to get incomes. Think of it. How do you get income off of your 1040 over to a 1041 for your family? And can you save more income tax by doing that than suffering the restrictions on your 1040? For example, if I was making 600, I retired. It's all investment income. If I was making 600, I'd get no SALT deduction. If I move 100 of that income over to a trust for my children and grandchildren, my income is now only 500 and I get my SALT deduction back.

[A]

Wow. Okay. I'm starting to realize the landscape now. And I believe you wrote a really great article with Steve Oceans that was essentially on this topic of non grantor trust. And what I hear you saying is we now have the ability to really have control when those phase outs come into play if we use non grantor trust rights. Am I hearing you correctly?

[B]

That's perfect. The exemption for married couples at $30 million, most people never get to $30 million. So if I want to gift away part of my 30 so I can accomplish this income tax planning that may make sense now. You have to weigh that with a step up in basis. But you can make those trusts, those non grantor trusts that are valid for income tax purposes. You can make them with a completed gift which would get that property out of your estate. Or in a handful of states we can create an incomplete gift trust. And when we create the incomplete gift trust, Carrie, I actually get to file a separate fiduciary income tax return. But if I die, it's still in my estate and I get a step up in basis. And Steve Oceans, who I wrote that article with, everybody should go to his website. There's a lot of good information out there and he's probably like the most creative person in tax and always, always thinking of something wonderful. So again, it's. It's those five things we wrote about in the article, shifting income from grandma and grandpa to children and grandchildren. And I know there's a kiddie tax, of course, we have to watch out for that. Using trust to expand the SALT deduction. Using trust to enhance our 199 cap, a deduction. Stacking up QSBS shares. And sometimes, when permitted by state law, using trust to save state income taxes. For example, a California resident could create a completed gift trust in Wyoming or Nevada or Alaska, South Dakota, Delaware, and suddenly they're going to be able to defer that California income tax until distributions go back to California.

[A]

All right, Bob, I'm intrigued by this. I don't want to miss out on the details of any of these five strategies that you're kind of laying out. And I think I got a little bit of the picture on income shifting, but can you go into a little bit of detail? So our listeners are like, okay, exactly how am I going to do this.

[B]

On the income shifting side? Fast forward, Carrie. You have a client with three children, nine grandchildren. All the grandchildren are adults. They're 21 through 30.

[A]

Now, is it important somehow that they have to be adults or just in this scenario only because of the kiddie tap?

[B]

Okay, I'm just making it easy for the CPAs listening. So what we're going to do is we're going to create one trust. We're going to put property into that trust, and then each year we'll spread that income across children and grandchildren. And if grandma and grandpa are in a 37% rate and some of the children are 12, and some of the children and grandchildren in the 22, there's going to be an arbitrage. So the arbitrage between 37 and 12 is obviously 25 points, and the arbitrage between 37 and 22 is obviously 15 points. So if somehow we average a 20% arbitrage and we do that, for every $100,000 we transfer, we save $20,000. But also we might be able to get Grandma and grandpa's income below 500. So they're back in the salt deduction world. And don't forget, the trust can also get a salt deduction.

[A]

Okay, talk about that. Specifically, the trust can get a entirely separate salt deduction from my individual tax filing. Am I hearing you right?

[B]

That's exactly right. So if my wife and I were at 600 of income, I could create a trust called a slant S L A N T for my wife. It's a non grantor trust and we would put enough property in there so that that trust would have 100,000 of income. So now our income on our 1040 is only 500. The trust has 100. We get a SALT deduction in both places. Now let's say we're in California just to pick on California. 100,000 of trust income. The state tax would be somewhere between 10 and $13,000. Okay, but that would be deductible. But more Importantly, on my 1040, at 600,000 my SALT deduction was limited to 10. But at 500 I can get it back up to 40. So that's the key. I can also along the same token, this is where it gets a little complicated. By getting income off of my personal return, I avoid that new 2:37 limitation on my itemized deductions. It just, it goes away if I can keep my income low enough.

[A]

Right. And is there any limit to how many times I can essentially expand this self deduction or shift income? And as long as I have enough kids and grandkids to spread it around and trust entities, can I just keep going as much as I need?

[B]

Yeah, you could just keep going. I just had a lady die. She and her husband were blessed with five children and they all were fruitful and multiplied and so did their grandchildren. So there's, there were great, great grandchildren by the time she died at 97. And she has set up a trust for everybody that would be fine. Now what doesn't work is if I had three children and I set up three trusts for three children. So I set up one trust for A, B and C, another trust for A, B and C and a third trust for A, B and C. Under 643F of the code, the government's going to collapse. Those treat you like one trust. But if it's a trust for A and her issue, B and her issue C and her issue, we're great.

[A]

Okay. Keep them separate is what I hear you say there.

[B]

Keep them separate. And our lawyer friends will be responsible for that drafting to make sure that the drafting just has to be rather adroit to get there.

[A]

I'm also interested in the potential of additional 199A. What can you tell me about that?

[B]

Bob, this is really fascinating. When you have an SSTB specified service trader business.

[A]

Yeah. For the listeners who are not sure what what SSTB is, we share it with everybody.

[B]

Those poisonous professions like medicine, dentistry, law, accounting, list of others. But if you're a cpa, financial planner, unfortunately Financial planning falls into that bad group, you do not get your 199cap a deduction if you make more than for a married couple, $395,000 in round numbers. Call it 400 freezing math. So Carrie, if I was a CPA financial planner and I made $400,000, I would get a 20% 199 cap deduction. Only pay tax on 320. But if I made 550, I wouldn't get any deduction because I'd be too high. My income would be too high. I'd get zero deduction. So if you had a not a CPA firm where state law might prohibit you from putting property in trust for grandchildren or children or a medical practice, a dental practice, you probably can't do that, right? Because of licensing requirements. But if you're a RIA, you may be able to move 20 or 30% of your stock into a trust and create a new taxpayer. Now what does that do? One is it takes income off of your 1040, possibly allowing you to qualify for the 199 cap a deduction. But then as long as you keep the income at the trust level below 197, the trust would also get a 20% QBI deduction. And that's very powerful. In the article I talk about Richard and Dolores who had four children, 11 grandchildren, 15 altogether. And we ran the math with 15 people and it's not an unreasonable situation. It's not out of the norm. And Instead of getting $20,000 of the 199 cap a deduction, we were looking at closer to $400,000 of the deduction. So very powerful thing.

[A]

Powerful. And so you're talking about stacking all of these things. I'm starting to feel concerned. And you mentioned some of the guardrails earlier, but what are the practical guardrails around using multiple non grantor Trusts to stack SALT and 199A deductions? How do you keep clients from running afoul of section 643F? You mentioned a little bit about that earlier. But let's make sure that we are not in a danger zone utilizing this really amazing tax opportunity.

[B]

Let's say you had one single child, but you thought you were clever and you created a trust for them in January, February, March, April, May, basically the same trust. The government's going to collapse all those down to one trust. That's 643F. So what we have to look at is Basically how does 643F operate and what can we do there now if my dad is alive, can he create a trust for my son Grant and then can I create a trust for my son Grant? And are those separate trusts? Absolutely.

[A]

That's not a problem because it's a different grantor. Right?

[B]

Right. Right now it's different. If five years ago I created a trust for Grant and I just run it through the photocopy machine and have a new trust. Now no one should do that. We should let the lawyers draft the trust. But let's say I was really lazy and I did that, those trusts would be collapsed.

[A]

That is good to know. All right, so I love these strategies. Amazingly powerful. Just basically became available with the passing of the new law. How can CPA financial planners identify the ideal client for this non grantor trust planning? And what are some of the warning signs that suggest maybe the client might be better off with a simpler structure? How do we segment and divide who we really are looking at for this particular strategy?

[B]

I think you start with do you have anyone that can't get the SALT deduction? Is there a way to get income off of their return? Then you ask yourself, is there anybody that can't get 199 cap A? Is there anyone who has adult grandchildren who are in medical school or law school beyond the kiddie tax where he could shift income to them? Is there anyone that just has a C corp that they're going to eventually have QSPs and their gain will exceed the statutory limitation of the QSPs? Probably 10 million for shares already out there. And if that person had three children, they could create a trust for A, B and C. If they could gift those shares suddenly their QSBS exemption stacks from 10 million to 40 million. And then finally, if you're in a state with a high state income tax and Ocean's has a chart on this on his website, can you move property from, say California to one of those states I mentioned and not pay California tax until there's throwback into California?

[A]

Wow Bob, this is amazing strategies as always. Thank you for bringing it to our community of listeners and our hope to you listening is that you got a valuable takeaway. Check out the show notes to find resources related to this episode and to learn more visit the AICPA pfp [e-mail] we'd love to know your speaker and topic ideas for future episodes, so feel free send us an email to financial planningicpa.org and of course if you get value from this podcast, we appreciate your support by following the podcast in your favorite podcast app. Let me just say a big thank you here. We are creeping up on 500,000 downloads for this podcast. So much appreciation to our community of listeners. We'll do something special to celebrate when we get to half a million. Thank you again for listening. I look forward to next time.

[C]

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