Discussion:CG Tax in CRUT

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Discussion Forum Index --> Advanced Tax Questions --> CG Tax in CRUT


Discussion Forum Index --> Tax Questions --> CG Tax in CRUT

Lrichards (talk|edits) said:

5 May 2014
I have experience with CRUT's, enough to make me hate them. Thought I had seen everything about them, but have a new situation, and was hoping some of you could shorten the amount of time I will spend answering what some of you will think is a simple question. The CRUT for the first time, had a substantial capital gain from mutual fund sales in 2013. The gain cannot be distributed as it is not supported by the trust or local law. The trust was written in the 70's and prohibits distribution of gains and of course inclusion of them in accounting income. Does the CRUT pay capital gains tax? If so, on what form? I cannot find any place on the 5227 where taxes could be paid. A simple trust would pay these on Form 1041. Do I need to also file a 1041 to pay capital gains taxes? Truly, I hate CRUT's and would like to punch the Treasury Department staff that allowed the creation of them.

WIBadgerCPA (talk|edits) said:

14 May 2014
By no means am I an expert, but since no one else responded, I thought I'd give you my two cents. Doesn't the CRUT call for a percentage of assets to be distributed. I believe that to the extent the distributions exceed the ordinary income tier, capital gains can be taxed to the beneficiary under the Tier system of allocating distributions.

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