@forologia wrote:
Will this maximum tax rate apply on proceeds from equity shares beneficiaries might sell in the future OR will such equity share profits be subject to normal capital gains taxes
Taxation at that point will depend upon the terms of the trust and how the gains are reported.
If the trust sells the shares and retains the proceeds, the trust will pay tax at the trust tax rates (i.e., use the trust tax bracket).
If the trust distributes the shares to the beneficiaries (for them to sell), the beneficiaries will report any gain on their individual income tax returns. Similarly, if the sales proceeds are distributed directly to the beneficiaries on their K-1s, the will pay any capital gains tax due at their individual income tax rates.
