Herb Smith wrote:
- quote -

I'd not make that assumption. I have a trust set up for my
child's college, but it's designed to last well beyond that.
At this point, each year the trustee sends a K1 so the child
is privy to the cap gains, dividends, interest. But the
exact contents of the trust are not revealed. I've only seen
the term 'blind trust' used for people whose actions might
impact the stock market, such as Alan Greenspan, or certain
politicians. It seems to me that distributing the taxable
proceeds on a K1 don't reveal the assets nor violate the
intent that blind trusts are set up for.

Further, the instructions for the 1041 (trust return) says;

"If you are reporting income from a qualified blind trust
(under the Ethics in Government Act of 1978), do not
identify the payer of any income to the trust but complete
the rest of the return as provided in the instructions. Also
write "Blind Trust" at the top of page 1."

JOE (at earthlink dot net)

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L K Williams <lanny[at]loxinfo.co.th> wrote:
- quote -

Exactly.

He has no knowledge or control during whatever period of
time he needs it to be a blind trust, but it's still going
to be a grantor trust, as you imply, so that he will be
taxed on all trust income

Stu

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Dick Adams wrote:

- quote -

hmmm... with a blank check?

ChEAr$,
Harlan

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"Dick Adams" <rdadams[at]smart.net)> wrote:

- quote -

Not having done a blind trust, I am assuming the following
based on work on trusts in general:

1. trust shows such income on 1041.
2. trust pays taxes, if necessary (considering whether
or how much of trust income is distributed to
beneficiaries, (see form 1041)
3. trust distributes income to beneficiaries in accordance
with trust instrument.
4. to the extent dividends and/or capital gains are
distributed, this amount will be shown on the
beneficiary's K1.
5. Note that the K1 does not identify the specific sources
of the dividends, capital gains, or other income - just
the bottom line numbers, coming from the trust. This
keeps the blind trust blind.

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Dick Adams <rdadams[at]smart.net) wrote:

- quote -

A blind trust means that the beneficiary has no knowledge of
the investments, etc. of the trust. He/she still has to
report the income from the K-1. You will note that the K-1
does not give the details of the income, just the totals for
the various categories. So, the beneficiary still has no
knowledge or control.

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

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Dick Adams wrote:

- quote -

I would assume the taxes are paid by the trust.

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When someone puts stock into a blind trust, how are taxes
paid on dividends and capital gains?

Dick

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