My wife is one of five beneficiaries of a trust established in the 80's by her father upon his death. Her mom had access to the income generated since the beginning. Recently her mom passed away and the trust will be divided among the five children. The trust investments are mostly stocks, some bonds and some cash. Each heir's distribution will probably in shares of the equities,thus getting a stepped-up basis for each stock.My question is will the trust have to pay capital gains tax on all stocks appreciation once the distribution to the heirs occurs?Thanks for any guidance.
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