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How much Money Can Be Taken

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CA
My wifes dad passed away, in his will he leaves 2 commercial properties that are in his own personal trust and my wife is the Trustee. She does not want to put Title of the properties into her name and then the properties into her Trust because the Lender has told us they will use the Due On Sale clause of the Mortgage and demand full repayment of the loan, which we cannot afford to do without selling the properties, and the Commercial Property Resale Is very low right now. She has 6 years left on the 10 year mortgage and we both feel it would be better to wait out the market for these 6 years. In the mean time we would like to use all or part of the income to make our life a little easier. The properties do generate about $4,000 per month in income after mortgage payments, HOA, property tax and various other maintenence issues. The State and Federal taxes are almost nothing as we have a very large depreciation deduction due to the current property tax assesment of the property. When I called the IRS to see how much money my wife can take from the property income, I was told twice that she can take what she likes as long as it is reported on her personal tax return as income. At the same time our tax person says she can only take $600 per year for trust maintenance duties and about 8%-10% for property management duties. Who is right??
 


justalayman

Senior Member
who is the beneficiary of the fathers trust?

sounds like the IRS answered like the wife is the bene of the fathers trust and the tax person answered you with the thought that she is not the bene of her fathers trust and as such, cannot receive money from the trust (as a bene) but can only expend funds to maintain the properties in the trust.
 

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