what makes an alaska native settlement trust unique

An Alaska Native Corporation Settlement Trust provides Sealaska and its shareholders with significant tax advantages. Distributions to shareholders (referred to as “beneficiaries” under the trust) will not be subject to federal tax.

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How much land did Alaska Native corporations get from the government?

Through ANCSA, the federal government transferred 44 million acres – land to be held in corporate ownership by Alaska Native shareholders – to Alaska Native regional and village corporations. The federal government also compensated the newly formed Alaska Native corporations a total of $962.5 million for land lost in the settlement agreement.

What is a native corporation trust?

“ Under the “1991’ law, a Native corporation may transfer some or all of its assets – such as surface land, stock and property – to a trust created just for the benefit of its shareholders.

What is a settlement trust?

That publication, which was re-issued by Sealaska in 2001, describes Settlement Trusts as follows: “ Under the “1991’ law, a Native corporation may transfer some or all of its assets – such as surface land, stock and property – to a trust created just for the benefit of its shareholders.

What was the Alaska Native Claims Settlement Act of 1971?

On December 18, 1971, President Richard Nixon addressed the delegates of AFN by phone and informed them that he had just signed the Alaska Native Claims Settlement Act into law. At the time of its passage, ANCSA was entirely different than any previous federal Indian policy.

Why are ANSTS important?

What is corporate asset conveyed?

Is ANC a benefit for future generations?

Can ANCs benefit from ANSTS?

Is there a corporate tax on an ANST?

Can an ANST receive appreciated property?

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Why was the creation of Alaska Native corporations significant?

Since the passage of ANCSA, various industries have been strengthened in Alaska, creating jobs in both the private and public sectors. By creating Alaska Native-owned, for-profit corporations, ANCSA also brought additional economic diversity to the state that has benefited, either directly or indirectly, all Alaskans.

What was the purpose of the Alaska Native Claims Settlement Act?

This 17(b) trail provides hunters legal access across private lands into a popular hunting area. The 1971 Alaska Native Claims Settlement Act (ANCSA) directs the Bureau of Land Management (BLM) to convey 45.5 million acres of public land to village and regional Native corporations.

How did the land settlement benefit the state of Alaska?

The settlement established Alaska Native claims to the land by transferring titles to twelve Alaska Native regional corporations and over 200 local village corporations. A thirteenth regional corporation was later created for Alaska Natives who no longer resided in Alaska.

Are Alaska Native corporations tax exempt?

There is nothing in the Act which exempts the corporations from paying State or local sales taxes, nor are they exempt under the U.S. Constitution. The Alaska Native Fund revenues do not retain their identity as Federal funds after distribution.

What rights do Alaskan Natives have?

ANCSA also gave Alaska Natives ownership rights to 40 million acres of land. Of the 40 million acres, the surface rights in 22 million acres were divided among over two hundred Native villages according to their population, with each village selecting its homelands and incorporating itself under state law.

How much land can a Native Alaskan claim?

The Allotment Act, as amended, authorized the Secretary of the Interior to convey up to 160 acres of “vacant, unappropriated, and unreserved non-mineral” land to individual Alaska Natives who could prove as head of household “substantially continuous use and occupancy of that land for a period of five years.” More than ...

How much land do Alaska Native corporations own?

Alaska Native regional corporations are owned by over 140,000 Alaska Native shareholders and hold title to nearly 27 million acres of land across Alaska.

Are Alaska Natives sovereign?

Alaska Natives maintained their own forms of traditional governments and sovereignty prior to the arrival of Westerners.

How do you claim land in Alaska?

After filing their intentions, homesteaders were required to live on the land, build a residence, and farm at least 10% of it within five years before a legal patent for the land was issued. After Alaska was purchased by the U.S., homesteaders began claiming land in Alaska.

Do Native Alaskans get money from the government?

When first issued in 1982, the annual dividend provided $1,000 for each Alaskan resident. Since then, the annual dividend has varied from a few hundred dollars to more than $2,000 per person. In addition, Alaska is the only state without a state income tax or a state sales tax.

Is tribal assistance taxable?

Businesses that Received Tribal Grants If a loan is provided and subsequently forgiven, the loan proceeds are still generally taxable. However, if the grant is made to a Tribal member-owned business, it isn't taxable to that member.

Is Alaska sales tax exempt?

The State of Alaska does not have a tax exemption certificate, as it is not necessary to have one. The Alaska Constitution provides that the State of Alaska is exempt from all taxes emanating from within Alaska.

Was the support of non Native Alaskans an important factor leading to the settlement of Alaska Native land claims?

Yes, the support of the non-Native Alaskans was an important factor in leading to the settlement of Alaska Natives claim land. Yes, this conclusion is consistent with the evidence in their learning block. Consider the following statement: ANCSA was a fair settlement for Alaska Natives.

Why did Alaska Natives reject reservations?

They objected strenuously when Russia sold Alaska to the United States in 1867, arguing that they were the land's rightful owners. Most other Alaska Native groups were unaware of the transaction and land transfer between the two foreign nations.

What part of the Statehood Act generated the movement for Alaska Native land claims?

The crux of the legal issue raised by Native land claims in Alaska was set out first and most definitively in Section 8 of the Alaska Organic Act of 1884 (Act of May 17, 1884, 23 Stat.

What did the Organic Act 1912 establish?

In United States law, an organic act is an act of the United States Congress that establishes a territory of the United States and specifies how it is to be governed, or an agency to manage certain federal lands. In the absence of an organic law a territory is classified as unorganized.

Alaska Native Settlement Trusts

6 Limitations on a Settlement Trust A Settlement Trust may not: • Operate a trade or business – Assets held by a Settlement Trust may only be used in an investment capacity • Alienate land or an interest in land from the settlor corporation – There are few exceptions including land conveyed for homestead by the Trust to a beneficiary Discriminate in favor of high ranking employees ...

Alaska Native Corporations and settlement trusts - KPMG

Tax administrative guidance since enactment of the U.S. tax law (Pub. L. No. 115-97, date of enactment December 22, 2017)

Latest Guidance on Tribal Funding Under ARPA Released by Treasury

$1B will be divided equally among tribal governments and $19B w ill be allocated according to a formula based on available tribal enrollment and employment data.

Alaska Native Corporations and the CARES Act - Fordham Law

Fordham University School of Law Fordham Journal of Corporate & Financial Law 150 West 62nd St. LL-129 New York, NY 10023 212-636-7008

Frequently Asked Questions for Indian Affairs American Rescue Plan Act ...

The information in this document applies only to American Rescue Plan (ARP) funding provided through Indian Affairs, U.S. Department of the Interior, under Section 11002 of the American Rescue Plan Act, and not to ARP funding provided to Tribes through the U.S. Treasury.

What is the purpose of a settlement trust?

The main purposes of the Settlement Trust are to promote the health, education and welfare of Native shareholders; preserve Native heritage and culture; and give greater protection to Native corporation lands .’. [4] In general, the Settlement Trust option appears to be a good one for ANCSA Corporations.

Who is the author of the ANCSA settlement trust?

What Are ANCSA Settlement Trusts? Researched and written by Jenny Bell Jones with input from current and former DANSRD colleagues – Department of Alaska Native Studies and Rural Development

What are the benefits of a BBNC trust?

If the only actual benefits to Trust beneficiaries are tax free distribution payments, occasional educational benefits, elders benefits and assistance with funeral potlatches, then these benefits are the same as what most shareholders currently receive with the exception of tax exempt distributions. If distributions from the Trust are always made in the form of cash to beneficiaries, rather than used for some of the things the BBNC Settlement Trust envisions, then it is up to those beneficiaries how the money is spent. That money may or may not be spent to “promote the health, education and welfare of the beneficiaries of the Trust and preserve the heritage and culture of Alaska Natives’. A less obvious but longer term benefit to beneficiaries is the protection that assets acquire once they are a part of the Trust and can no longer be used by the ANC in ways that may incur risk. This does not mean that there is no risk involved with the kinds of investments a Trust can make but risk will be much lower as long as the Trust is managed responsibly.

How does a trust work?

When the Corporation establishes a Trust it is giving some of its assets to the Trust and the Trust will then manage the assets separately from those that the Corporation keeps. The ANC can do this in one of two ways: on a regular basis, perhaps annually, or as an endowment which means the Corporation makes a large one time contribution to the Trust. Corporations that are using the Settlement Trust as a vehicle to reduce their tax burden would likely make annual contributions. If an ANC endows a Trust this does not prevent it from making more contributions later on.

What does it mean to distribute assets through a trust?

Distributing the assets through the Trust means, at least in theory, that more money is available to the beneficiaries. The CIRI website provides a table which describes clearly how much money might be saved by using a Settlement Trust.

Can settlement trusts be used to secure investments?

Settlement Trusts can secure investments in ways that the ANCs do not , and have the potential to provide significant benefits to shareholders but these benefits will be dependent on:

Does an ANC endow a trust?

If an ANC endows a Trust this does not prevent it from making more contributions later on. Under the new tax law, the Corporation makes those contributions to the Trust pre-tax, and then the Trust pays tax at a lower rate. If the Corporation pays dividends to shareholders those dividends are subject to taxation.

How much did the federal government pay for the Alaska Native settlement?

The federal government also compensated the newly formed Alaska Native corporations a total of $962.5 million for land lost in the settlement agreement. ANCSA had expansive effects, reaching far beyond Alaska Native people.

Who signed the Alaska Native Claims Settlement Act?

On December 18, 1971, President Richard Nixon addressed the delegates of AFN by phone and informed them that he had just signed the Alaska Native Claims Settlement Act into law. At the time of its passage, ANCSA was entirely different than any previous federal Indian policy.

Why is ANCSA important?

To understand ANCSA, it is important to understand the history of aboriginal land claims in Alaska.

How long did Alaska Native corporations have to be exempt from federal securities laws?

Originally, ANCSA exempted Alaska Native corporations from some federal securities laws for twenty years. Because Alaska Native corporation stocks were not eligible to be sold or disposed of during the twenty-year period after the passage of ANCSA, many federal securities laws did not apply.

What is the ANCSA?

https://vilda.alaska.edu/. The Alaska Native Claims Settlement Act of 1971 (ANCSA) was a new approach by Congress to federal Indian policy. ANCSA extinguished aboriginal land title in Alaska. It divided the state into twelve distinct regions and mandated the creation of twelve private, for-profit Alaska Native regional corporations ...

How many regions did Alaska have?

ANCSA divided Alaska into twelve regions defined by the common heritage and shared interests of the indigenous peoples within each geographic area. The regional boundaries established which people, villages, and communities that each Alaska Native regional corporation would serve. The boundaries do not directly represent land ownership; they did, however, define the areas in which each regional corporation could select lands to be conveyed under the provisions ANCSA. Today, within each region there is a complex landscape of governance, land ownership, roles, and relationships.

Why was the Alaska Federation of Natives formed?

1966: The Alaska Federation of Native is formed to advocate for a land claims settlement. The Alaska Federation of Natives (AFN) formed in 1966 in response to the land claims issues that were being brought forth by various organized Alaska Native groups.

What is an electing settlement trust?

The term “ electing Settlement Trust ” means a Settlement Trust which has made the election, effective for a taxable year, described in subsection (c).

What is surrender of Native Corporation?

For purposes of this section, the surrender of an interest in a Native Corporation or an electing Settlement Trust in order to accomplish the whole or partial redemption of the interest of a shareholder or beneficiary in such corporation or trust, or to accomplish the whole or partial liquidation of such corporation or trust , shall be deemed to be a transfer permitted by section 7 (h) of the Alaska Native Claims Settlement Act.

When does paragraph 1 (B) apply to a trust?

paragraph (1) (B) shall be applied to such trust on and after the date of the transfer in the same manner as if the trust permitted dispositions of beneficial interests in the trust in a manner not permitted by such section 7 (h).

Can Native Corporation earnings be reduced?

The earnings and profits of the sponsoring Native Corporation shall not be reduced on account of any contribution to such Settlement Trust.

Can a settlement trust elect to have the provisions of this section apply to the trust and its beneficiaries?

A Settlement Trust may elect to have the provisions of this section apply to the trust and its beneficiaries .

Is Native Corporation stock taxable?

Third, as amounts distributed by the sponsoring Native Corporation with respect to its stock (within the meaning of section 301 (a)) during such taxable year and taxable to the recipient beneficiary as amounts described in section 301 (c) (1), to the extent of current or accumulated earnings and profits of the sponsoring Native Corporation as of the close of such taxable year after proper adjustment is made for all distributions made by the sponsoring Native Corporation during such taxable year.

When did Alaska settle trusts become legal?

The “1991” amendments to ANCSA, enacted by Congress in 1988, authorize Alaska Native corporations to place assets in a “settlement trust” for the benefit of shareholders, Natives, and descendants of Natives. In 2001, Congress eliminated most tax impediments to the formation and capitalization of settlement trusts and adopted provisions ...

What is the most common type of trust?

The most common type of trust established is set up to pay out dividends to shareholders. The corporation pays into the trust and then the trust itself sets up rules as to how it will pay dividends. Trusts can also be created to pay funds out for elders, scholarships, or child care, Marrs notes.

What is an ANST?

A shareholder vote is required to establish an ANST, which—if approved—is then managed by a board of trustees. Given the benefits to the corporations and shareholders, there has been overwhelming support for creating ANSTs. The most common type of trust established is set up to pay out dividends to shareholders.

Does Old Harbor Native Corporation have a trust?

Old Harbor Native Corporation has established two trusts. One pays 100 percent of its shareholders in the same way the corporation might pay out a dividend. Additionally, there is a trust established to pay elders. “In our case, we give them a monthly payment, in addition to their regular dividend trust,” Marrs says.

Can a settlement trust defer income?

In the case of a contribution which consists of property other than cash, a Settlement Trust may elect to defer recognition of any income related to such property until the sale or exchange of such property, in whole or in part, by the Settlement Trust.

Can you deduct Alaska Native claims?

No deduction shall be allowed under this section with respect to any contributions made to a Settlement Trust which are in violation of subsection (a) (2) or (c) (2) of section 39 of the Alaska Native Claims Settlement Act ( 43 U.S.C. 1629e ).

Does a settlement trust have to include deductions in income?

Subject to subsection (g), a Settlement Trust shall include in income the amount of any deduction allowed under this section in the taxable year in which the Settlement Trust actually receives such contribution.

Does Native Corporation have to apply for each taxable year?

For each taxable year, a Native Corporation may elect to have this section apply for such taxable year on the income tax return or an amendment or supplement to the return of the Native Corporation, with such election to have effect solely for such taxable year.

Can a Native Corporation be revoked?

Any election made by a Native Corporation pursuant to this subsection may be revoked pursuant to a timely filed amendment or supplement to the income tax return of such Native Corporation.

Does a settlement trust have to apply for each taxable year?

For each taxable year, a Settlement Trust may elect to apply this subsection for any property described in paragraph (1) which was contributed during such year. Any property to which the election applies shall be identified and described with reasonable particularity on the income tax return or an amendment or supplement to the return of the Settlement Trust, with such election to have effect solely for such taxable year.

Why are ANSTS important?

Though ANSTs have long been a valuable mechanism for ANCs due to the favorable tax treatment received from the Internal Revenue Service on trust income and beneficiary distributions , they became much more lucrative after the tax reform known as the Tax Cuts and Jobs Act of 2017.

What is corporate asset conveyed?

Corporate assets can be conveyed that will provide value to the ANC and the ANST. Consider the following: ANC non-cash property contributions result in a deduction equal to the lesser of its adjusted basis in the property or its fair market value. The ANC will not recognize gain or loss on such contributions.

Is ANC a benefit for future generations?

The value they bring to ANC shareholders is no longer only a current benefit, but now a benefit for future generations as well. By strategically taking advantage of the favorable tax treatment of ANSTs and maximizing tax benefits to the ANC and its shareholders, a permanent fund can be built that will last for generations.

Can ANCs benefit from ANSTS?

ANCs can benefit greatly from taking advantage of ANSTs, if done the right way. Contact BDO for assistance with tax compliance, financial statement audits, board and shareholder education and workshops, and asset contribution and beneficiary benefit modeling.

Is there a corporate tax on an ANST?

There is no corporate-level tax for contributions to ANSTs. Non-cash property contributions can create long-term benefits past the year of contribution. For example, consider the tax impact of contributing a building to an ANST: Current year ANC tax benefit from contribution of building to ANST $105,000.

Can an ANST receive appreciated property?

An ANST can receive appreciated property and defer tax to future years. This will help get income-generating assets into the ANST to benefit the shareholder beneficiaries.

Timeline of Significant Events: How Ancsa Came to Be

The Mandates of Ancsa

• December 18, 1971 marked a new era for federal Indian policy. It was also a significant day for Alaska Native peoples on an individual level. Several provisions of ANCSA affected individuals in ways that neither they nor the federal government really understood at the time. ANCSA original language addressed the specific congressional mandates of Al...

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The 1991 Amendments