Net Income from a trust

[jbjmrd]

What is the name of your state? New York

I have a trust which states that the net income will be distributed to me after the end of year accounting. The Trust consists of primarily stocks which have shoen a gain of Approx 19% this year. is the net income the 19% gain?

 

[seniorjudge]

What is the name of your state? New York

I have a trust which states that the net income will be distributed to me after the end of year accounting. The Trust consists of primarily stocks which have shoen a gain of Approx 19% this year. is the net income the 19% gain?

I would suspect that the expenses would have to be deducted before you get net income.

But ask your tax preparer to be sure.

 

[jbjmrd]

Trust distribution

I would suspect that the expenses would have to be deducted before you get net income.

But ask your tax preparer to be sure.

Thank You and yes all expenses come first but there seems to be confusion on Net Income. Is Net income considered the gain on the stocks in the portfolio or is it just dividends etc. The trust sayd Net Income will be distributed at end of year but Trustee is saying the net income does not include any gains. He plans on just distributing the income rec from the stocks. the gains in principle, he claims, from the investments are not net income. They are just increases in principle. Thanks for your help.

 

[anteater]

In normal, day-to-day usage, "net income" would not include unrealized portfolio gains. Realized gains might be a debatable matter, but I would side with the trustee even in that case.