Received Irrevocable Trust Distribution

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
Post Reply
Topic Author
mauipixie808
Posts: 2
Joined: Fri Nov 26, 2021 7:48 am

Received Irrevocable Trust Distribution

Post by mauipixie808 »

My husband received a large distribution from his families irrevocable trust in 2021. It was from the sale of the family home. We are both on Medicare our approx annual income $30000. We are not sure what the tax implications will be. We would like some guidance. Any information would be very helpful. Yes, we know we could be taxed just not sure at what percentage. Not sure how it is taxed, regular income or if its principal from the trust, and it not being taxed. Thank you
Last edited by mauipixie808 on Fri Nov 26, 2021 4:23 pm, edited 1 time in total.
bsteiner
Posts: 9211
Joined: Sat Oct 20, 2012 9:39 pm
Location: NYC/NJ/FL

Re: Received Irrevocable Trust Distribution

Post by bsteiner »

Ask the trustees. If need be, the trustees could ask their lawyer.

Capital gains are usually taxable to the trust even if they're distributed but sometimes they're taxable to the recipients.
Topic Author
mauipixie808
Posts: 2
Joined: Fri Nov 26, 2021 7:48 am

Re: Received Irrevocable Trust Distribution

Post by mauipixie808 »

yes we are being taxed not the trust
Gill
Posts: 8221
Joined: Sun Mar 04, 2007 7:38 pm
Location: Florida

Re: Received Irrevocable Trust Distribution

Post by Gill »

The trustee should be filing a 2021 tax return for the trust (Form 1041) and then sending you a Form K-1 which will tell you what to report on your personal tax return. Perhaps the trustee can now give you an indication of the tax implications to you. It is quite possible than nothing is taxable to you but only the trustee can give you that information.
Gill
Cost basis is redundant. One has a basis in an investment | One advises and gives advice | One should follow the principle of investing one's principal
Post Reply