On Apr 10, 12:26*pm, Gene <gpa...[at]gmail.com> wrote:
- quote -

NO. The dividends that are orinary income cannot offset a Capital
Loss. The dividends that are
Capital Gains Distributions can beoffset with the Capital Loss on
selling the stock A.

- quote -

You are correct. Principal withdrawals are not taxed, but any income
must first be withdrawn.

- quote -


The benefit was to keep those assets out of your mother's estate when
she died.

Therefor, they actually passed to you upon father's death and hence
their basis is
as of the date of death of your father and you will be subject to long
term capital gains tax when
they are sold.
- quote -

That is correct.

- quote -

No

- quote -

ed

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I appreciate your feedback on my previous post. It was very helpful.

A follow-up:

- Currently, Trust B (Credit Shelter/Family Trust) is comprised of
various stock. My mother is successor trustee of Trust B which was my
father's trust until he passed away. My sister and I will be
surviving trustees upon the passing of my mother.

There are some winners and losers in the trust's stock portfolio. The
winners participate in dividend reinvestment. Of course, the
dividends are taxable. Ideally, we would prefer to reinvest those
dividends. In order to offset this income, we would like to sell the
losers. Say stock A had $5,000 basis and we intend to sell at
$1,000. This is $4,000 loss. Can it be used to offset income
generated from the good stock?


- Withdrawing from trust: given that my Mom is successor trustee and
assuming she has the legal power to withdraw from trust B, is she
taxed when making a principal withdrawal? Say she wants to withdraw
$5,000. She sells stock A with basis $5,000; therefore no loss or
gain.

I assume principal withdrawal is not taxed.


- Eventually, my sister and I will be trustees. In the same scenario
above, is there any tax imposed? If so, at what rate? I would think
that there shouldn't be tax because if there was, then what would be
the benefit of Trust B.


- My mother's Bank Accounts are titled in her name only and set-up as
Pay-On-Death. My sister and I are the beneficiaries. As I
understand, when she passes, the transfer of monies in those accounts
goes to the beneficiaries and bypasses probate.

Would we have to pay any tax on the transfer of these funds?

If tax is due, would re-titling the bank accounts in her Trust account
with my sister and I as successor trustees reduce or eliminate any tax
when she passes?


Thanks and enjoy the weekend!

Gene

--
<< ------------------------------------------------------- > << 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 (2007) - All rights reserved. > << ------------------------------------------------------- >