@ECollins93 wrote:
So (if the above is true information) keeping that in mind, is it better to sell stock right away and pay the tax, or transfer ownership to beneficiary and let them pay the tax when they sell in the future? Is there a tax benefit to leaving it in trust? Should beneficiaries leave the stock in trust and take periodic distributions but never actually sell the stock?
You absolutely should seek professional tax guidance as well as guidance from a financial planner, particularly if the trust has substantial assets. The terms of the trust control and you have only stated that the trust is irrevocable.
Note that the tax bracket for trusts is highly compressed which means the trust will generally pay tax at a higher rate than if the income/gain had been distributed to the beneficiaries.
Also note that if distributions are made every year from the trust, then typically a Form 1041 (and associated K-1s) will have to be prepared every tax year. Alternatively, the stock could most likely be distributed in-kind to the beneficiaries who would then take the trust's basis in the stock.
