M
Maineaic
Guest
My wife is trustee for her niece's Irrevocable Education Trust which was established under Florida law. The trust was established by my wife's grandmother who makes annual contributions. Standard past tax practice has been to file a 1041, distribute any income (dividends and interest) and take the DNI exemption. Trust income was generally included in the girls' parents income tax return (via form 8814), as this was better than filing a 1040 for the child.
The girls mother has a new accountant who says the trust should pay the tax directly. Is this possible? Must the income be distributed each year (the trust itself doesn't address this specifically)? (I would understand the trust reimbursing the parents for incremental tax due to trust income.)
I'd appreciate any comments on this situation.
thanks,
p.s. this is a very interesting forum!
The girls mother has a new accountant who says the trust should pay the tax directly. Is this possible? Must the income be distributed each year (the trust itself doesn't address this specifically)? (I would understand the trust reimbursing the parents for incremental tax due to trust income.)
I'd appreciate any comments on this situation.
thanks,
p.s. this is a very interesting forum!