How Do Trusts Get Taxed?

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  • Опубликовано: 4 дек 2024

Комментарии • 118

  • @charlesvandenburgh7754
    @charlesvandenburgh7754 2 года назад +5

    In New York State, our Irrevocable Trust has it's own identification number and pays taxes to the amount of yearly capital gains. We need to file a separate estate tax form ( State and Federal) besides a personal 1040. Perhaps I didn't understand: Is it the amount of money or just the capital gains that's taxed from what's inside the trust.

  • @paulmaier6305
    @paulmaier6305 3 года назад +9

    thank you. you make the complicated VERY simple. many others seem to
    make the simple VERY complicated.

  • @hcwong7967
    @hcwong7967 2 года назад +5

    For Non-Revocable Trust, the trust income goes to beneficiaries, they are taxed through their tax returns. What about capital gains from the trust, the capital gain tax is higher than individual capital gain tax. Any comment?

  • @ronsmith7739
    @ronsmith7739 3 года назад +8

    Clear as mud, how much is paid 37%, !0% or what??? Also what about dividend stocks???

  • @niaralosusa
    @niaralosusa 2 года назад +6

    Very good explanation. Thank you.
    Do you have a video speaking to the tax implications (to the inheritors, the estate, the trust, etc.) when the trust is passed on once the Grantor dies?

  • @carlpeterson8850
    @carlpeterson8850 2 года назад +4

    Hi. Thank you. If the trust income is earned in an S Corp Trust, is the income earned considered community property for marriage purposes because the income flows through to the individual. Thanks.

  • @ldebrobander
    @ldebrobander 3 года назад +5

    Is money received from a federal and state tax return which was filed on behalf of the trust which is subsequent deposited into the bank account of the revocable trust, is this taxable to the trust even though the tax return is a result of overpaying taxes in the first place? Thank you!

  • @corybooker5332
    @corybooker5332 Год назад +2

    The video was actually pretty tough to follow: 4:30…grantor trusts are essentially pseudo-pass through entities for income tax purposes.

  • @mml1224
    @mml1224 2 года назад +4

    hi paul! i thumbed it and subs'd. However, i didn't see a long term or short term capital stock gain example? i know on 1040, the LT gains are zero taxes from 40 to 80k depending on filing status, any truth with that w/ estates taxes or do u just add up all types of income and go thru G calculation?? thanks!

  • @paulthomasshepherd5156
    @paulthomasshepherd5156 3 года назад +7

    Not clear at all on this one. Taxes remain involved? Taxes can be avoided? Who becomes responsible to pay them? etc. etc.

  • @M_B_24
    @M_B_24 3 года назад +5

    But what is so confusing is that a trust doesn’t begin until a death occurs. The way you’re explaining seems more like an investment account and the portion of what the beneficiaries of the trust will be taxed at their ordinary income levels? Is that what you are saying? This video was not very clear to me. I hope you do another one with maybe examples because this is the VERY question I can’t seem to get a clear answer on. What if life insurance goes into a trust? That is after death. That’s what a trust is for correct? Death? Please explain and thanks for these videos!

  • @YoYo-hy7xi
    @YoYo-hy7xi 11 месяцев назад +5

    Holy dogg on it Paul!!! Get to the point!!!!

  • @jeffreym3233
    @jeffreym3233 2 года назад +2

    As a data point, the trust (irrevocable) for which I am trustee had an 18% tax rate in 2021 despite lots of long term gains. Income distribution deduction caused pass through of tax to the beneficiary. The 3x% rate applies in more rare cases where ordinary income occurs.

    • @Jose-sy1je
      @Jose-sy1je 11 месяцев назад +1

      So you can distribute all the income and then pay the personal tax rate? But long term taxes for trusts should still be around 20% and not 37% if I am not mistaken. What happens if you sell real estate? As a private person you are not taxed on those gains, but a trust would be taxed at the top rate I assume. How can you avoid that?

    • @wayneguy6043
      @wayneguy6043 11 месяцев назад

      You can’t ……..unless you do a 1031. But then you won’t have the cash

  • @x3054lif3x
    @x3054lif3x 4 года назад +10

    Phenomenal content. Keep it going man.

  • @johnison76
    @johnison76 Год назад +2

    Thank you for posting! Very informative!

  • @privateland8929
    @privateland8929 5 лет назад +21

    Hi Paul, thanks for addressing the tax situation. Can you tell us about what the trustees responsibility is with respect to the tax liability of an irrevocable trust? Does this type of trust still use the settlors TIN or does it get assigned a new TIN?

    • @earlscheib7754
      @earlscheib7754 3 года назад +1

      Once a person dies their SSN is closed so their TIN is invalid

    • @wayneguy6043
      @wayneguy6043 11 месяцев назад

      The beneficiary pays the taxes

  • @joemunch58
    @joemunch58 3 года назад +1

    Sections 671 to 678 of Title 26. Helvering v. Clifford and Mallinckrodt v. Nunan.

  • @Omikoshi78
    @Omikoshi78 3 года назад +2

    How do people typically incorporate 11million lifetime gift exemption with trust? Assuming the beneficiary’s are financially literate/responsible, is there benefit to using trust to transfer wealth?

  • @Bellinilove
    @Bellinilove 3 года назад +15

    Hello, Paul, or anyone who saw this footage and understood correctly, the long story short, as long as the trust that I set up is a “REVOCABLE LIVING TRUST” , the beneficiaries are not subject to the 37% income tax like the faulty financial advisor mentioned? Thank you. I just want this conclusion clearly.

    • @j._7054
      @j._7054 3 года назад +2

      Or an irrevocable trust

    • @amberfaith3196
      @amberfaith3196 3 года назад +3

      @@j._7054 Just to help make it more clear it's not just any irrevocable living trust as there are many different types of Irrevocable Living Trust that may not be a Grantor Trust. But to be more specific what was said in the video, the Irrevocable Trust Type is called Irrevocable Income Only Trust that is considered a Grantor Trust. I hope this helps 💜

    • @wayneguy6043
      @wayneguy6043 11 месяцев назад

      The beneficiary should claim the interest income and be taxed at their own rate…..

  • @jackzimmer6553
    @jackzimmer6553 2 года назад +2

    Thanks for your videos regarding estate planning. I’m trying to piece together a strategy for myself and my wife who is unfortunately battling Alzheimer’s. Meeting with an attorney tomorrow to take care of POA’s (medical/financial.) Going also to find out his opinion on Living trusts. Thanks again for your time and effort with this subject!

  • @Harpadzo
    @Harpadzo 2 года назад +2

    If a Grantor Trust is not filed anywhere and it is for Estate purposes, how does the IRS even know you have one unless you report it? If you are getting creative Royalty money or even if you have an LLC, those are all reported on your own TIN anyway, right? Not sure I understand how and at what point the IRS gets involved in a Living Trust except perhaps at death of the Grantor and perhaps second Survivor Grantor named on the Trust... Confusing.

    • @jakebryan01
      @jakebryan01 Год назад

      Look at the irs codes. Your required to file for certain trusts. Although the system is opt in and voluntary anyways, so I don’t see how just not filing or telling them anything wouldn’t work.

  • @lynnbradley7387
    @lynnbradley7387 5 месяцев назад

    My husband and I recently have an irrevocable trust. My question is, is there a place I can go to to get information for what kind of deductions I can use when we do the taxes for the trust is there a website an article some thing what kind of things are deductible there is a Home included. We are the trustees for example the property tax, the homeowners insurance what kind of things can be used as deductions when we file the trust taxes thank you in advance.

  • @johndoedoe4840
    @johndoedoe4840 Месяц назад

    Well, a bypass trust requires you use a 1041, and it definitely is taxed higher than ordinary income tax rates. If you had an asset or assets in there that threw off a lot of taxable income, you would be hit much harder than if you were able to use a 1040. That's why it's a good idea to put investments in there that have high appreciation but very little distributed income. Digressing a little, I'm trying to figure out the liklihood of a judge dissolving a bypass trust that is no longer needed and would not get a step up unless something is done. Any thoughts?

  • @cesterly4668
    @cesterly4668 Год назад +2

    There are irrevocable trusts that do not produce any income but hold cash, savings accounts, etc to afford privacy and there is no income tax if no income.

    • @WilliamMurphy-uv9pm
      @WilliamMurphy-uv9pm 8 месяцев назад

      Like me, you would prefer no tax and get no growth over a potentially large gain taxed at 37%. That means you get 63% of that gain after taxes. The other way you get zero. What say you now?

  • @lunamorris2091
    @lunamorris2091 Год назад

    This is a fantastic video. It's clear and easy to understand your explanations. Thank you for providing this information.

  • @origamicrane685
    @origamicrane685 7 месяцев назад

    It seems like a CRUT or CRAT would be much better than an irrevocable living grantor income-only trust because you get the income stream without the 37% tax rate. Do CRUTS and CRATS also shield the assets in them from Medicaid and nursing homes?

  • @sheryllegg845
    @sheryllegg845 2 года назад

    Social security only income…how would that be taxed in a grantor trust or can social security checks even be deposited into a grantor trust?

  • @andrewsein6192
    @andrewsein6192 3 года назад +3

    Hi Paul, any chance you can do a video on foreign people that want to set up a Trust? For example, Chinese mother (non US resident, living in China for most of the year) wanting to set up a trust for her daughter (US resident). Real estate property is located in US, owned by the mother.
    Legally speaking I’m not sure how this works. Can foreign people set up trusts?
    I’ve contacted multiple lawyers and seems like it’s too complicated to even explain.. all of them have been unwilling to help. Why?

    • @cammiek3348
      @cammiek3348 2 года назад +1

      Try contacting a Chinese (American) attorney. They most likely have the knowledge than the average.

  • @frankhyde3384
    @frankhyde3384 2 года назад

    Can you set up a irrevocable trust for just your home and a revocable trust for every by ING else with a pour over will?

  • @eigobike3929
    @eigobike3929 3 года назад +4

    Great explanation. I just wish my sister who is the trustee would learn this.

    • @Jose-sy1je
      @Jose-sy1je 11 месяцев назад +1

      Why would your sister be the trustee? Wouldn't she hold all the responsibility then if things are not done right? Or does it only make sense to have a trustee who is located in a particular state? I saw online that trustees are very expensive.

  • @leonsceco
    @leonsceco 2 года назад

    Fantastic explanation, brief, to the point and spot on. I've recently setup a Revocable Living Trust and needed some clarity, and this was it. Thanks!

  • @drfiberglass
    @drfiberglass 3 года назад +2

    Start at 4:00.... You can thank me later...

  • @artcardona8912
    @artcardona8912 3 года назад +1

    Question(s): can there be more than one trustee to manage any type of trust… and will setting up multiple trustees relieve the taxation burden?

    • @Nsmithq99
      @Nsmithq99 2 года назад +3

      Yes, there can be co-trustees of a trust, but that has nothing to do with the taxability. That is based on the assets themselves and the total estate of the settlor (decedent).

  • @LadyGoza
    @LadyGoza 4 года назад +2

    Can you post a video on taxing a Supplemental Needs Trust in Texas?

  • @coobay978
    @coobay978 3 года назад +1

    Does a Grantor Trust protect your trust assets if I am personally sued?

  • @MrMagnasco
    @MrMagnasco 7 месяцев назад

    but... and irrevocable trust CAN be set up as a Non-Grantor trust, right?

  • @ahbushnell1
    @ahbushnell1 3 года назад +2

    I want to hear about non-grantor trust.

  • @wompol7117
    @wompol7117 Год назад

    so can u have that income put somewhere tax free? IULs? a501c3 owned by the trust???

  • @callofdutymobile1074
    @callofdutymobile1074 4 года назад +2

    What about a Danasty Trust. Which one would be better comparing the two. Do you also recommend staying damestic or going offshore internationally. In what circumstance would a trust be taxed at 37%. Was thinking about putting a business in a Nevada trust or a South Dakota Danasty Trust.

    • @edhuber3557
      @edhuber3557 3 года назад

      Dynasty. In the hood, you can get 'Da Nasty'.

  • @douglasvandyke7666
    @douglasvandyke7666 2 года назад

    Thank you. Very clear AND HELPFUL.

  • @MissAllyson707
    @MissAllyson707 2 года назад +1

    So my income only trust has to make at least $12k/mo. in order to be taxed 37%?

    • @Jose-sy1je
      @Jose-sy1je 11 месяцев назад

      Is that a non-grantor trust?

  • @coolgraces
    @coolgraces 3 года назад +3

    Can we set up a trust without hiring a lawyer?

    • @earlscheib7754
      @earlscheib7754 3 года назад +2

      Yes, but can you afford making a mistake?

  • @ohsnap1993
    @ohsnap1993 2 года назад

    Stock portfolio gains in a trust don’t count as income correct? Just any dividends paid out or principal withdrawals correct?

    • @AthensBlueG35
      @AthensBlueG35 2 года назад +1

      Gains are never taxable until they're '"realized", ie, until you sell for a gain. Selling for a gain or a loss is what triggers tax consequence. The mere fact an asset appreciates means nothing to the IRS. They only tax you when you sell

  • @Tricia2023
    @Tricia2023 Год назад

    How do you get a copy of said trust if everybody has died meaning lawyers who set it up for the parents who have also died 😮

  • @LadyGoza
    @LadyGoza 4 года назад +1

    If I, as the mom, the trustee, put money into the 3rd party SNT, and it doesn't generate income, will that money get taxed?

    • @Corkfish1
      @Corkfish1 4 года назад +2

      If you're talking about income tax then no. If there's no income there's no tax. You may have to file a gift tax return when you fund the trust however.

    • @LadyGoza
      @LadyGoza 4 года назад

      @@Corkfish1 The attorney funded the trust when it was created.

    • @Nsmithq99
      @Nsmithq99 2 года назад +2

      @@LadyGoza The attorney may have done the paperwork, but “funded the trust” means the person that provided the assets.

  • @keetonalder5452
    @keetonalder5452 3 года назад +1

    Helped a lot! Thanks.

  • @TheHouseofChameleons
    @TheHouseofChameleons 3 года назад

    I didnt know about this nursing home (irrevocable income trust) and wasnt offered by my lawyer. I wish most lawyers are like you. Mine is snobby.

    • @rickbeam
      @rickbeam 2 года назад +1

      Hire a new Lawyer.

  • @fjs1111
    @fjs1111 2 года назад

    Paul, I appreciate the information.

  • @kenta3148
    @kenta3148 3 года назад +4

    I am still confused. I thought there is no tax on trust / inheritance unless the entire estate is over 11.7 million in 2021. Are there taxes for everything over that $12K? Also, no mention on State taxes.

    • @AthensBlueG35
      @AthensBlueG35 2 года назад +4

      Any dividends, rental income, or other income generated by, or gains withdrawn from, the trust while the grantor is living and in control of the trust is considered income for tax purposes. There is tax on that income. After the grantor dies, then the assets pass to the beneficiary as an inheritance, and for that there is a federal tax exemption like you mentioned.

    • @AthensBlueG35
      @AthensBlueG35 2 года назад

      I'm just a layperson, but that is my understanding. Confirm with your CPA

    • @Jose-sy1je
      @Jose-sy1je 11 месяцев назад

      ​@@AthensBlueG35What about a non-grantor irrevocable trust?

  • @tigerblood6823
    @tigerblood6823 8 месяцев назад

    Is there a Truat named Family Trust?

  • @PrezVeto
    @PrezVeto 2 года назад

    But how does the income of a revocable living trust get taxed after the settlor has died?

  • @elliottwatts3643
    @elliottwatts3643 Год назад

    Thanks for this video.

  • @avion1963
    @avion1963 2 года назад

    Almost exactly what my parents fin adv said. Thank you!

  • @HughButler-lb6zs
    @HughButler-lb6zs Год назад

    Is the trust still.a grantor trust after the persons who set it up become deceased .

  • @rickeyalyles7609
    @rickeyalyles7609 3 года назад

    Can the title4dprogram take trust funds???

  • @bc1441
    @bc1441 Год назад

    Excellent, thank you!

  • @wbaiey0
    @wbaiey0 3 года назад +1

    Love it. Love it. Love presentation

  • @bibianhuynh
    @bibianhuynh 4 года назад +1

    Watching you from Boston!! I have a son attending BU!

  • @LydiaSings
    @LydiaSings 2 года назад

    Whoa, wait. If 100% of the money used to fund the trust is post tax dollars, the grantor has to pay income tax on that money, again, instead of only capital gains taxes on market returns and interest?

  • @timleary1664
    @timleary1664 2 года назад

    so funny, I work at BU law. Thanks for doing this.

  • @smolville
    @smolville Год назад

    I got a pile of un-payed K-1's from my parents trust. I'm guessing that I owe $10,000. I can't pay that. They set up an emergency fund which I'm also taxed on. I say put that emergency fund in my account so I can pay my taxes. Pretty pathetic payoff on a $5 million trust.

  • @bocktoonja627
    @bocktoonja627 3 года назад +2

    3:41

  • @rcjic26
    @rcjic26 3 года назад

    Hey Paul, great information!! Quick question: Understand at the state level each state has different rules and regulations for trusts. When I set up a trust while living in one state and I move to a different state and perish there I assume the state of my death will take precedence. Would it change the eventual execution of the trust to the rules in that state? There are still state inheritance taxes that will need to be paid, correct? Sorry for the deep questions. Thank you for the clear and concise explanation. Wish I had seen this video 2 years ago. Lots to think about.

  • @jaxturner7288
    @jaxturner7288 4 года назад +39

    4 minutes in is too late to be claiming to “jump right in”.

    • @glasschin7123
      @glasschin7123 3 года назад +3

      I disagree, his introduction explaining how he handles business and his consultation process is priceless. I would put this man on retainer.

    • @jaxturner7288
      @jaxturner7288 3 года назад

      @@glasschin7123 your perspective and your opinion of him professionally has nothing to do with how someone should frame a conversation regarding to claims of it’s flow and progression.
      The content itself is irrelevant, it’s the inferring of a false timeline and to a jump in that timeline that does not correlate logically.
      Regardless of the story, no story should claim during chapter two, that now we can jump to page 1 and get started.

    • @edhuber3557
      @edhuber3557 3 года назад +1

      @@jaxturner7288 I'd agree, and some of the OP's videos are worse yet. As for Glass Chin, he surely could put this attorney on retainer....but does anyone think he did?

    • @edhuber3557
      @edhuber3557 3 года назад

      @@glasschin7123 Did you put this lawyer on retainer, or did you just run your mouth?

    • @glasschin7123
      @glasschin7123 3 года назад

      @@edhuber3557 no way! This guy's a dumbass lol

  • @cococonway2504
    @cococonway2504 2 года назад +2

    please get to the point quickly.

  • @jamesodell3064
    @jamesodell3064 2 года назад

    I am trustee for my brother. He receives the dividends from the stocks in the trust and he pays the income tax on his own return. I send him a K-1. When I sell stock and receive capital gains that stays in the trust and is taxed at up to the 37% rate.

    • @Jose-sy1je
      @Jose-sy1je 11 месяцев назад

      How can he receive the dividends from the stocks that are held in the trust? I didn't know that's possible. Can't you also distribute any gains to him from the sale of the stocks? Your brother is lucky to have you bc those trustees cost a lot of money.

    • @jamesodell3064
      @jamesodell3064 11 месяцев назад

      I send him a check every month. I set it up so the broker automatically sends the checks. I do have the option of sending more from the principal or sale of stocks if he needed it for say the purchase of a home, car or medical expenses. So far he has not needed to use any of the principal. If you use to much of the principal then there might not be enough left for old age. @@Jose-sy1je

  • @eddiemontgomery7088
    @eddiemontgomery7088 4 года назад +1

    Excellent explanation
    Thanks for saving time
    Excellent

  • @kish5230
    @kish5230 4 года назад

    What about a business trust? Or Unincorporated Business Organization Trust? Irrevocable

  • @brians.oconnell648
    @brians.oconnell648 3 года назад

    How does a family hide a trust but bounce the taxes to the true legal heir

  • @joelmitchell18
    @joelmitchell18 Год назад

    I am an advisor. Shame on that advisor. Trusts are an incredible tool.

  • @Peacetoself
    @Peacetoself 3 года назад

    are you licensed in the state of Ohio ?

  • @Omikoshi78
    @Omikoshi78 3 года назад +1

    1991 feels like yesterday

  • @dccrusin8290
    @dccrusin8290 3 года назад +1

    Sounds as though you/he remembers ENOUGH from that M.S. Tax Law graduate school program!

  • @Ted204K
    @Ted204K 5 месяцев назад

    I ain’t paying no 37%

  • @ivanof214
    @ivanof214 6 месяцев назад

    Did alot of talking but didn’t say jack squat. In fact all he did was confuse people by saying irrevocable trusts are taxed as grantor trusts smh

  • @jagroopsingh5900
    @jagroopsingh5900 2 года назад

    👍

  • @rrassoc
    @rrassoc 3 года назад

    Who is taxed when the trust is set up for a pet?

  • @elinoreberkley1643
    @elinoreberkley1643 2 года назад

    Fiat is illegal. You pay taxes when you put the fiat in. TRIPLE TAX!

  • @cheryldodd-marko9787
    @cheryldodd-marko9787 3 года назад

    🕊🇺🇲💕