Discussion:Life After the Death of the Grantor
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| Revision as of 23:54, 7 September 2009 Edcosoft (Talk | contribs) (YOu are allowed) ← Previous diff |
Current revision Riley2 (Talk | contribs) (I see no require) |
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Current revision
Discussion Forum Index --> Advanced Tax Questions --> Life After the Death of the Grantor
Discussion Forum Index --> Tax Questions --> Life After the Death of the Grantor
IdahoCPA22 (talk|edits) said: | 7 September 2009 |
| I have a client with a revocable living trust and a will with a pour-over provision. Both Grantors have died.
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| 7 September 2009 | |
| It would appear that if you distribute the entire estate, the current year becomes the final year of the Trust so the current income would all be distibuted on K-1s to the beneficiaries. This leaves nothing in the trust to apply the Exemption to, so it makes no difference whether it's a Simple or a Complex Trust (atually it's a Comlex trust in the least year because you are distributing corpus. The 1041 would have no income to tax and should be marked "Final Return".
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| 7 September 2009 | |
| Assets would also be divided and given to the benes. A trust that distributed its princ is a complex trust. I'd do this as promptly as possible. It may require selling real estate. Securities don't have to be sold. They can be passed to the benes just by having the broker set up 2 new accts and dividing the asset. The benes would have to fill out the required forms.
A simple trust is only permitted to distribute income. | |
IdahoCPA22 (talk|edits) said: | 7 September 2009 |
| I forgot to add something with the original post...The distribution of the estate is not all happening in one year due to slow moving attorneys. There was no income in the short year, the first full fiscal year had the income, and the final short year is the closing year. (3 returns only span a total of 2 years). So, the first full fiscal year, the one with all the income, was not the final year. Also, during that year with all the income, no distributions had been made yet, so unless the trust doc makes it mandatory to attribute the income to the beneficiaries, it will all be taxed at higher levels.
Due to the wording I listed above, I think that might be a possibility, but I'm just checking with all my friends here at TaxAlmanac... I'm sorry, Edcosoft & Blrgcpa, I left out some crucial info....Would this info change anything? | |
| 7 September 2009 | |
| YOu are allowed 65 days after the end of your FY to make income distributions so they are charged to the beneficiaries. Considering the onerous tax implications I should think the lawywers would allow the income to tbe distributed, even if it is only "credited" as it would be if it was mandatory (in a Simple Trust).
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