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Financial Planning / Tax Strategies


Subject:  Re: Taxes for Family Trust Date:  5/12/2017  12:48 PM
Author:  brucedoe Number:  125903 of 132868


If a trust distributes income to a beneficiary, the beneficiary pays the tax, not the trust.

That is my condition. Because of distributions from the Trust, it is down to alot of one common stock, a significant health care mutual fund and a preferred stock plus some cash. If the common stock is sold in part, very large capital gains would be entailed as the stock has been held for something like 50 yrs. As I am retired, my paying these taxes on capital gains would seriously jeopardize me, so the trust pays them. As a result I do not trade in the trust account to keep taxes to a minimum, essentially just the capital gains tax on the health care mutual fund. If I sold something in the Trust, I would then have to sell extra shares to cover Federal and State taxes so I just let the account run, something I had to do in the distributions (for example paying off the grandchildren's college debts which is in the Trust).

I, of course, pay the tax on the dividends and interest I get from the trust.

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