Revocable Living Trust Income Tax

[EGreene21]

What is the income tax%  for a revocable living trust vs an individual?

[BettieG]

As you may know, in a revocable living trust, the grantor (the person(s) who creates the trust) retains control over the trust assets and can revoke the trust at any time.  Because the trust is revocable, it is considered a disregarded entity for tax purposes, which means that any income earned by the trust is reported on the grantor’s individual income tax return, and not on a trust return.

As a result, the income tax rate for a revocable living trust is the same as the grantor’s individual income tax rate.  The revocable living trust does not file a separate tax return.

Thus, at the end of the tax year, you would report any income received from the trust on your (the grantor’s) individual income tax return as personal income.  The trust does not report the income, which would flow to your personal income tax return as the grantor.

I hope this is helpful.