capital gains in trust

[TrustUser]

What is the name of your state?california
there seems to be situations in which capital gains from a trust can be distributed to the beneficiaries, and times when it cant

trying to determine if i can, with this trust. i do have discretionary powers, to the point that i would be okay in that sense

 

[LdiJ]

What is the name of your state?california
there seems to be situations in which capital gains from a trust can be distributed to the beneficiaries, and times when it cant

trying to determine if i can, with this trust. i do have discretionary powers, to the point that i would be okay in that sense

It all depends on what the trust says. There are no hard and fast generic rules about what can or cannot be distributed from a trust. It depends entirely on how the trust is set up. Who pays tax on the capital gains (the trust or the beneficiary) also depends on how the trust is set up.

 

[FlyingRon]

And depending on the trust involved, there might not be any "capital gain" (even though the asset is worth more than it was when it went into the trust).

 

[adjusterjack]

there seems to be situations in which capital gains from a trust can be distributed to the beneficiaries, and times when it cant

Capital gains don't occur until an asset is sold. Have you sold an asset from the trust? Are you going to?

Or are you referring to income from a trust owned asset?

More details would help get you more appropriate comments.

 

[TrustUser]

i will be selling a house. all depending on what it sells for, but i am anticipating a gain on it

 

[adjusterjack]

There are many variables involved in computing capital gains tax on the sale of a house.

Study IRS Publication 523. It'll help you understand.

2020 Publication 523 (irs.gov)

 

[TrustUser]

thanks - at least at this point, i dont need any help in figuring out how much the gain is

just whether i can distribute the gains out of the trust and to the beneficiaries

i have plenty of power within the trust document to take advantage of any situation to make it better for the beneficiaries

but i still need to abide by what is legal

and my research seems divided - there seems to be times when you can distribute and other times when you can not

this is not a personal residence of any beneficiary. it was rented out for 3-5 years before i started the remodel phase. so best to think of it as an investment property that is owned by the trust

 

[adjusterjack]

my research seems divided - there seems to be times when you can distribute and other times when you can not

What research is that? Seems to me that the only research you should be doing is reading the California Trust Law:

California TRUST LAW Laws - 2020 California Probate Code, DIVISION 9 - TRUST LAW :: 2020 California Code :: US Codes and Statutes :: US Law :: Justia

Somewhere in there is your answer.

Or, consult an attorney.

 

[TrustUser]

thanks for the link - will check it out

 

[LdiJ]

thanks - at least at this point, i dont need any help in figuring out how much the gain is

just whether i can distribute the gains out of the trust and to the beneficiaries

i have plenty of power within the trust document to take advantage of any situation to make it better for the beneficiaries

but i still need to abide by what is legal

and my research seems divided - there seems to be times when you can distribute and other times when you can not

this is not a personal residence of any beneficiary. it was rented out for 3-5 years before i started the remodel phase. so best to think of it as an investment property that is owned by the trust

Again, it depends on what the trust says. There are no specific laws that state when you can or cannot distribute from a trust, because it all depends on the type of trust and what it says.

 

[TrustUser]

thanks ldj, that is the conclusion that i have come up with, as well. the trust gives me the leeway to do so. thanks everyone for chipping in !!