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@rmfrog1 wrote:
....does the IRS require a trust to do similar withholding of income to pay part of the income taxes that beneficiaries would owe?
The IRS does not, provided the trust distributes all of its income and gain to the beneficiaries.
Note that some states require pass-through withholding for nonresident beneficiaries.
@rmfrog1 wrote:
....does the IRS require a trust to do similar withholding of income to pay part of the income taxes that beneficiaries would owe?
The IRS does not, provided the trust distributes all of its income and gain to the beneficiaries.
Note that some states require pass-through withholding for nonresident beneficiaries.
Further note, that when trusts distribute income/gain to beneficiaries, they must ensure that they have sufficient withholding and/or have paid estimated tax on the income/gain distributed to them.
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