trust as a pass through entity

[vivski]

What is the name of your state? mn...but the matter of the trust was in california.
my question is this, my father in law passed away 2003, there was a will, and a trust designed for probate purposes.
the executor paid all taxes, state , federal, fidicuary, and estate , all debts, and all expenses of the trust administartion, and final expenses before distributing any assests to the beneficiaries.
now the irs is saying that the trust was a pass through entity and all beneficiaries must pay tax on their inheirtance.
how, if the executor was requiered by law to pay all the taxes that she paid, do the beneficiaries still owe the irs more tax?
is this not considered double taxation? and if not, then why not?
i have read alot of things that say that an inheirtance is not taxable to the heirs, and i have also read that it is the trustee or executors responsibility to pay the irs before they are allowed to distribute any assets to the beneficiaries.
i have also read that pass through entities are s-corporations, partnerships, and limited liability companies, and that trusts and estates are not included in that realm.
am i totally confused ?i need an answer, the tax man is breathing down my neck as we speak.
thank you, any advice or suggestions would be greatly appreciated.What is the name of your state?

 

[anteater]

The adivice and suggestions that you received the last time you asked these questions are still applicable. Why did you not take the advice?

LdiJ -

understand, but the way that the trust was worded and set up can be critical to the answer. That I why I wouldn't answer your question without being about to review the documentation.

In addition, if the trust issued K1s to the beneficiaries when it distributed the assets, then that complicates things as well.

Tranquility -

I didn't answer the question in the first place because I know there is simply not enough information to make a determination. We would go back and forth repeatedly and, at the end of the day, we still would not have communicated enough. Sorry, but for this question you need to pay and see someone who can look at the facts. It may very well be expensive. Sometimes things are hard and you need experienced and knowlegable people to find out the results.

 

[vivski]

thanks

when i first wrote, i had no idea that the irs was claiming the trust as a pass through entity...and the question is not the same question.
if you read the question, i am asking how the irs can tax an inheirtance at all.
the question is if the estate has the obligation to pay all taxes, before being able to distribute any assets, then how can they tax it again to the heirs...you have not answered the question, and like the irs, have left me even more confused, were you an irs agent before? because, you are skirting around the real question.
i have read many of the archived questions and answers and in them , you, and many other people keep saying inheirtances are not taxable to the heiras...you say that the estate or trustee of the estate is responsible to pay the taxes, before being distributed...
there is no need to be mean...mean people suck.
thanks for at least answering, even though you diidn't really answer anything at all.

 

[LdiJ]

when i first wrote, i had no idea that the irs was claiming the trust as a pass through entity...and the question is not the same question.
if you read the question, i am asking how the irs can tax an inheirtance at all.
the question is if the estate has the obligation to pay all taxes, before being able to distribute any assets, then how can they tax it again to the heirs...you have not answered the question, and like the irs, have left me even more confused, were you an irs agent before? because, you are skirting around the real question.
i have read many of the archived questions and answers and in them , you, and many other people keep saying inheirtances are not taxable to the heiras...you say that the estate or trustee of the estate is responsible to pay the taxes, before being distributed...
there is no need to be mean...mean people suck.
thanks for at least answering, even though you diidn't really answer anything at all.

You have had two tax professionals tell you that you CANNOT get good answers to your questions unless you take the paperwork and go see a tax professional who can actually read the paperwork and answer your questions.

Every professional on this board could help you, IF we were actually able to read your paperwork. NO professional can help you unless they can read your paperwork.

 

[anteater]

...
there is no need to be mean...mean people suck.
thanks for at least answering, even though you diidn't really answer anything at all.

It isn't being "mean." It's more like bewilderment. In your situation, you are well beyond anything that an internet forum can help with.

 

[vivski]

bewildered

ok, i do appreciate the fact all of you have responded, now , if you could, explain to me what paperwork I need to figure this out?
all the trustee has given us is the first and final account..is it the entire trust document i need, and how do i go about getting it, from the attorney who took care of the legalities, or from the trustee? is it the will?
and secondly, what exactly does someone look for in this document that will tell us if we are to be taxed, or if it is the trustee /estate's responsibility to make sure the taxes are taken care of?
maybe someone can answer that question.
please understand, that this has been a drain on us, first we lost our father, and then eight days later we lost his girlfriend of fifteen years,she was in a nursing home for eight years due to an stroke, and had a heart attack, when he went to see her he found out she wasn't going to make it, went home, and had a heart attack on the freeway and died, eight days later, the doctor told us the only reason he thought she was hanging on was to see him, and for mercy sake,we told her he was gone, then, the next day, she passed away too.
my understanding was that the trusttee was supossed to take care of everything according to the first and fianal report of the trust, along with the attorney and cpa's help.
there is no way that my father in law would have left things this way, for so many taxes to be paid to the irs by the heirs he would've had the estate pay whatever needed to be paid.. because he was a very knowledgeable man..
something went wrong somewhere along the lines.
and when the final account and report says in bold ink that the trustee took care of all the taxes, as she was required to do, i guess this just confuses me. thank you, i will not bother you again.

 

[vivski]

bewildered

ok, i do appreciate the fact all of you have responded, now , if you could, please explain to me what paperwork I need to figure this out? what i need to take to a professional.
all the trustee has given us is the first and final account..is it the entire trust document i need, and how do i go about getting it, from the attorney who took care of the legalities, or from the trustee? is it the will?
and secondly, what exactly does someone look for in this document that will tell us if we are to be taxed, or if it is the trustee /estate's responsibility to make sure the taxes are taken care of? believe me when i say she , the attorney and the cpa were very well paid to make sure this was taken care of the right way. the attorney alone received over 16 thousand dollars. the trustee , over 8 thousand.
maybe someone can answer that question.
please understand, that this has been a drain on us, first we lost our father, and then eight days later we lost his girlfriend of fifteen years,she was in a nursing home for eight years due to an stroke, and had a heart attack, when he went to see her he found out she wasn't going to make it, went home, and had a heart attack on the freeway and died, eight days later, the doctor told us the only reason he thought she was hanging on was to see him, and for mercy sake,we told her he was gone, then, the next day, she passed away too.
my understanding was that the trusttee was supossed to take care of everything according to the first and fianal report of the trust, along with the attorney and cpa's help.
there is no way that my father in law would have left things this way, for so many taxes to be paid to the irs by the heirs he would've had the estate pay whatever needed to be paid.. because he was a very knowledgeable man..
something went wrong somewhere along the lines.
and when the final account and report says in bold ink that the trustee took care of all the taxes, as she was required to do, i guess this just confuses me. thank you, i will not bother you again.

 

[vivski]

p.s...

the trust was a living trust that became irrevocable upon the passing of my father in law, does this help any? maybe not, but i will try.

 

[LdiJ]

the trust was a living trust that became irrevocable upon the passing of my father in law, does this help any? maybe not, but i will try.

I don't know how many times we have to tell you this...you need professional help....from someone who can read the documents.

You aren't getting any further responses here because we have told you what you need to do.

I will not respond again. You can't get help in this case from an internet message forum. Its beyond that kind of help.

 

[vivski]

sorry.
i was'nt planning on using any advice or suggestions as legal advice. i was only asking a question , that seems to be clear cut to me, and every other place i have gone to online for information.
though, do you not claim to be an expert?
i was under the impression that the people on your forum giving advice are professionals....don't worry, i will not use your forum again for any reason.
i do not need to be talked to in a bad tone. thank you and have a good day.