Some simple trust tax law questions

Mar 17, 2005 1 Replies
W

I am the successor trustee of an irrevocable trust. It was set up by my father and my mom is the beneficiary.



  1. How can I distribute the corpus of the trust, if needed, without it being taxible income to the beneficiary? I.e. how do I report this on the 1041 and/or the K-1 to my mom.
  2. What is the State for State Trust Law purposes? That of the trustee, the beneficiary, or the source of the original trust instrument? Any help or pointers to reference material would be greatly appreciated. Will



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S

The portion of the trust that was originally donated to the trust is a gift, not taxable income. If you have been distributing all the income of the trust to your mother so that she and not the trust paid taxes, whatever's left can be distributed tax free. To the extent the trust paid taxes but did not distribute income and it instead was added to corpus, I think (but I'm not sure) that it will also come out free of additional taxes.

I don't know what you mean. Anything for state trust law purposes would depend on the laws of the state you are in, which you did not mention. Stu

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