My question is this...since these are considered "complex" trusts by the IRS, does the selling of the old securities and the purchase of the new ones require the payment of capital gain taxes, or were the taxes already paid on a yearly basis?
In other words, were the "old" trust investments tax-deferred? According to my reading of the 1041 publication, our taxed were supposed to be paid in annual gain/loss fashion, so the actual liquidation and rebuy process should not generate any "extra" capital gain tax liabilities.
Is it that individual equities being sold ARE potential capital gain, but mutual funds gain/losses have already been taxed on a yearly basis?
Maybe someone here can help with this...thanks!