My 98 y old father is very ill and will die soon.He established a revocable trust and I am a cotrustee,an executor and a beneficiary.
One of the assets in the name of the trust are EE series Treasury bonds the face value of which is $60000.
Each of the bonds accumulated an interest approximately $500 per bond.
My father's income has been very small and my income is substantially larger. Furthermore he resides in the State of Florida where there is no state tax and I reside in New York.
As far as tax implications are concerned is it more
advantagous, considering the fact that he is in a lower tax bracket than I, that the Trust which is linked to his SS #, redeems the bonds prior to my father's death and thus he will have to pay to the IRS income tax on the interest obtained from the redemption of the bonds?.I suppose that if I redeem the bonds which I will inherit upon his death the interest will be considered to be my income and therefore may be taxed at a higher rate since I am in a higher tax bracket.Am I right making this assumption?
Also,am I correct in assuming that since he resides in Florida there will be no state tax consequences but if I redeem the bonds I will have to pay NYS tax?What is the name of your state (only U.S. law)?
One of the assets in the name of the trust are EE series Treasury bonds the face value of which is $60000.
Each of the bonds accumulated an interest approximately $500 per bond.
My father's income has been very small and my income is substantially larger. Furthermore he resides in the State of Florida where there is no state tax and I reside in New York.
As far as tax implications are concerned is it more
advantagous, considering the fact that he is in a lower tax bracket than I, that the Trust which is linked to his SS #, redeems the bonds prior to my father's death and thus he will have to pay to the IRS income tax on the interest obtained from the redemption of the bonds?.I suppose that if I redeem the bonds which I will inherit upon his death the interest will be considered to be my income and therefore may be taxed at a higher rate since I am in a higher tax bracket.Am I right making this assumption?
Also,am I correct in assuming that since he resides in Florida there will be no state tax consequences but if I redeem the bonds I will have to pay NYS tax?What is the name of your state (only U.S. law)?