mrr2534 <finvarra2534[at]gmail.com> wrote:

- quote -

I suggest you take a copy of the will, the trust instrument,
and any other documents you have received from the executor
to a lawyer. If the property was left to your son directly,
the will doesn't authorize the executor to divert it into a
trust of his own creation. Again, consult a lawyer.

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"mrr2534" <finvarra2...[at]gmail.com> wrote:

- quote -

The trust is accruing income but the uncle realizes that
your son's tax bracket is consideraly lower than Trust tax
brackets, so he "distributed" the tax liabiity for the
income to your son and left the "Cash" income in the trust.
The terms were that the income wasn't to be distributed.

So your son is in the 15% tax bracket (actually only for
some of the income and the rest is in YOUR tax bracket), but
compare those with Trust tax brackets.

ed

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"mrr2534" <finvarra2534[at]gmail.com> wrote:

- quote -

It depends on the precise terms of the trust. But in
general trusts of this type are irrevocable and are required
to pay their own income tax. They get a deduction for any
income distributed to the beneficiary, who pays tax on it.
But that's the only tax a beneficiary should pay tax on.

If you're legitimately getting a K-1 it would be because
your son or his parents would have some rights in the trust
that would cause it to be a "grantor trust" under internal
revenue code §671 etc.

Stu

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My minor son's grandmother died and she designated her son
(my son's uncle) as Executor. A Trust was set up in my
son's name by the uncle with no funds to be distributed
until my son was an adult. This Trust has its own
"Beneficiary's identifying number" (not my son's social
security number). Today we received a Schedule K-1 (Form
1041) from the uncle (again with the "Beneficiary" listed as
the Trust with its own ID -- a 20-xxxxxxx number) with
instructions that we had to file my son's share of income,
etc on our 1040 form, and were responsible for paying any
taxes. Is this correct? I checked with the IRS and the
person I spoke with said whoever was listed as Beneficiary
was required to submit the form. This is the trust--NOT my
son who has received no funds whatsoever. I'm very
confused.

Thanks for any help...

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >