Can a trustee and beneficiary of a irrevocable trust gift money to the same trust, if so how much is allowed and does the trust have to pay taxes on such a gift ?

Forum|Forum|1 year ago
April 26, 2024
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I have 3 questions pertaining to gifting money to a irrevocable trust I would like to get answers to which are as follows:

1) Can a trustee and beneficiary of a irrevocable trust gift their very own personal money to the same trust ?

2) If so what is the maximum dollar amount that the trustee and beneficiary is allowed to gift per year?

3) Does the trust have to pay income taxes on any money it receives as a gift from the trustee and beneficiary ?

Thank you

Not A Product Question

M-MTax

"Irrevocable trust" is vague....there are differing types and terms but usually:

1. Gifts to trusts are gifts to the beneficiaries.

2. No maximum dollar amount but over $18k to each beneficiary and a 709 needs to be filed.

3. Trusts do not have to pay taxes on gifts to the trusts.....which are gifts to beneficiaries........unless the donors exceed their lifetime exclusion of over $13 million.

fordescort12Author

I appreciate your reply to my questions and your answers.

So just to confirm, its also ok for both a trustee and beneficiary to make such a gift to the same trust ?

Thank you

M-MTax

So just to confirm, its also ok for both a trustee and beneficiary to make such a gift to the same trust ?

It's technically OK but it's not a gift at all if the settlor, trustee, and beneficiary is the same person and beneficiaries cannot give gifts to themselves. Also any gift to a trust is not a gift to the trust but a gift to the beneficiaries for federal tax purposes.