If my child's trust fund has 2 million dollars in UT and it generates 20,000 annual income, does my child only pay taxes on the income that it generated or the entire 2 million on the trait did
- posted
11 years ago
If my child's trust fund has 2 million dollars in UT and it generates 20,000 annual income, does my child only pay taxes on the income that it generated or the entire 2 million on the trait did
annual income, does my child only pay taxes on the income that it generated or the entire 2 million on the trait did
Your child is no different than any other taxpayer. The child reports his income, takes any applicable deductions and credits and ten computes tax. The assets are not taxed. However, depending upon the ageof the child and whether the child is your dependent, the child may be subject to the "Kiddie Tax". I.e., his investment income is taxed at your tax rate, rather than the rate that applies to his/her income. Information on the Kiddie Tax is at:
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