Message Font: Serif | Sans-Serif
No. of Recommendations: 0
If my dad has a fund that is in a living-trust and I am the beneficiary of it. . . then if something were to happen to him how would inheritance taxes and capital gains play into it?

The assets pass to you at their basis on the date of your father's death. Therefore, capital gains taxes will not be due on the appreciation of his assets at his death, and records supporting his basis are unnecessary. Your basis in the assets when you dispose of them will be their value on the date of his death. If it's just your dad's trust (no marital / A-B trust), then the trust will be subject to estate tax on it's value at his death if it's value is greater than the estate tax exemption amount for the year of his death.

... for the dividends capital gains he has been paying to offset the principle?


Print the post  


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.
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.