Question

Irrevocable Trust

Forum|Forum|6 years ago
January 25, 2020
2 replies
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I have a brokerage account in an irrevocable trust with it's own TIN. How do I claim the interest on my personal return return?

A

Anonymous

irrevocable trust means nothing. a critical question is - is the grantor (the person who put the assets in the account) the same as the beneficiary or the beneficiary's spouse. this or certain other abilities of the grantor would make this a grantor trust. the grantor would pick up the income. if it is because there is an EIN number a grantor trust return must be filed.

if it is not a grantor trust than a regular trust return must be filed. whether the trust pays the taxes on the income or the income is distributed to the beneficiaries would depend on the wording of the trust.

E

EU51_2

Employee

What is the tax table used to compute taxes on the trust income (money Not transferred to beneficiaries)?

LeonardS

The 2019 Estate and Trust Income Tax Brackets are:

$0 to $2,600 in income: 10% of taxable income.
$2,601 to $9,300 in income: $260 plus 24% of the amount over $2,600.
$9,301 to $12,750 in income: $1,868 plus 35% of the amount over $9,300.
Over $12,750 in income: $3,075.50 plus 37% of the amount over $12,7505

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J

jtax

Employee

For an irrevocable trust, as mentioned by @12309 you first need to determine if the trust (or sometimes just part of the trust) is a grantor trust. That will control where the income (or portions of the income) need to be reported.

Did the trust make distributions of income to beneficiaries (e.g. yourself)? If so and the trust is not 100% grantor trust, it will probably need to file a 1041 and include K-1s (which are like 1099s) to the beneficiary. The trust is taxed on income it retains, if any, the beneficiaries are taxed on income they receive.

This is quite complicated and you are best advised to go back to the attorney who wrote the trust for advice. Or second best a CPA or enrolled agent who prepares trust returns all the time and is very knowledgeable.

If you find out more about the trusts grantor status, free to ask more here.

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