Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
Currently, the only money a beneficiary receives is through disbursements from the trust.

In order to meet Social Security credit requirements, we are investigating the possibility of hiring the beneficiary to perform a service, and to pay the beneficiary in income rather than disbursements (about 1/3rd of the total amount would be in income, the rest disbursements). The trust allows the trustee to have discretion over the amount to be distributed to the beneficiary, so it seems the distribution can be reduced without concern.

Business-wise, it seems the best option would be to have the beneficiary have a sole proprietorship, as it requires the least amount of paperwork and other requirements.

The trust currently pays the beneficiary's annual income tax (fed and state). Given these proposed changes, would there be any issues with the trust continuing to pay his income tax (with an added schedule C) and also pay his self-employment tax (schedule SE)?

Thanks
Brett
Print the post  

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement