Starting date for non-grantor trust

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Subject Author Date Starting date for non-grantor trust NoClue 11-14-2009  Re: Starting date for non-grantor trust Stuart A. Bronstein 11-14-2009
Posted by NoClue on November 14, 2009, 10:08 am Please log in for more thread options As I understand it, the income of a grantor trust is reported by the grantor. When the grantor dies, the succesor beneficiary reports the income of the trust. Does the switch-over occurs on the date of death? Or the day before? TIA -- << ------------------------------------------------------- >> << 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. >> << ------------------------------------------------------- >> Posted by Stuart A. Bronstein on November 14, 2009, 10:29 am Please log in for more thread options > As I understand it, the income of a grantor trust is reported > by the grantor. When the grantor dies, the succesor > beneficiary reports the income of the trust. Actually in the normal situation the trust becomes irrevocable on the date of death. So the trust reports the income until the property producing the income is distributed to the beneficiary. The trust can recognize the income and pay tax on it, though it’s not normally recommended. Bracket creep for trusts is much steeper than for individuals, so the trust would likely end up paying more tax than the individuals. The taxable income can be made recognizable by the beneficiary instead of the trust by making a distribution to the beneficiary during the tax year. > Does the > switch-over occurs on the date of death? Or the day before? The grantor is considered the owner of the property through the date of death. The trust is considered the owner beginning the day after. -- Stu http://downtoearthlawyer.com -- << ------------------------------------------------------- >> << 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. >> << ------------------------------------------------------- >> Similar Threads Posted Calculation: Foreign Nongrantor Trust Beneficiary Statement January 13, 2009, 5:08 pm Starting Date For Record Keeping in NY April 12, 2006, 11:28 pm Starting an Internet company September 22, 2008, 7:59 pm Californa resident - moving overseas - starting business February 16, 2010, 9:17 pm Special Needs Trust owning and renting a house to the trust beneficiary February 5, 2007, 1:51 am Reform a Credit Shelter Trust to make it a Grantor Trust? November 19, 2007, 6:10 pm Is the Credit Shelter Trust a Grantor Trust? September 24, 2007, 8:48 pm Re: Is the Credit Shelter Trust a Grantor Trust? September 28, 2007, 3:59 pm Re: Is the Credit Shelter Trust a Grantor Trust? October 8, 2007, 6:43 pm Re: Is the Credit Shelter Trust a Grantor Trust? October 9, 2007, 8:28 pm