Simple Trust

[Hungry Jack]

A simple trust that was established in Illinois 20 years ago will be disolved next month.
The beneficiaries have paid state and federal taxes each year on the annual earnings.
Do the beneficiaries pay federal and state taxes on their share of the corpus when it is distributed?
Thanks in advance.

 

[abezon]

Corpus generally is not taxable. However, capital gains are taxable, & most states allocate capital gains to corpus. So, there could be some taxable capital gains in the trust.