Washington.
I will be trustee on an AB Trust, one trust of which is irrevocable (B trust). Income generated by the B trust is paid out and taxes are paid by the beneficiaries not the trust. If capital gains are reported on assets (eg mutual fund) held in the trust, I assume the trust must pay the income tax on the capital gain. Is the tax rate higher for trusts than for an individuals? If a trust asset is sold, is the increase above the cost base taxable capital gain for the trust? If the asset increases in value but is not sold until the trust is ended with assets going to the beneficiaries I believe there is no capital gain to the beneficiaries until they sell the asset. Is that true?
Thanks
I will be trustee on an AB Trust, one trust of which is irrevocable (B trust). Income generated by the B trust is paid out and taxes are paid by the beneficiaries not the trust. If capital gains are reported on assets (eg mutual fund) held in the trust, I assume the trust must pay the income tax on the capital gain. Is the tax rate higher for trusts than for an individuals? If a trust asset is sold, is the increase above the cost base taxable capital gain for the trust? If the asset increases in value but is not sold until the trust is ended with assets going to the beneficiaries I believe there is no capital gain to the beneficiaries until they sell the asset. Is that true?
Thanks