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tax on trust

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C

clare

Guest
If a trust is in real estate and the trustee benefits from the income, when the real estate is sold, who pays the tax on the sale? Does the trustee receive the assets less the original value of the trust?
 


ALawyer

Senior Member
I think you are confused. The BENEFICIARY is the primary one who should benefit from the trust, not the trustee (although in many living trusts the beneficiary is also the trustee).

In a REVOCABLE living trust the gains and losses are passed thru to thef beneficiary; in an IRREVOCABLE trust the trust itself is the taxpayer, at least to the extent of undistributed income.
 
C

clare

Guest
The trust is in the name of the two surviving sons, however the mother receives the lease income. She has the power to sell the real estate. What I would like to know is does she benefit from the sale less the original value of the real estate when the father died? What is the tax law concening this? Is the trust liable for paying the capital gains which is 39% or is she personally responsible for paying the capital gains which is 20% There is a huge gain as it has been in trust 20 years and the real estate value has soared....commercial property. Does my question make more sense?
 

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