Hi Meggie235,
Thank you for participating in today's event. Unfortunately, there is not enough information to answer your question. However, I can provide some general information.
Generally, assets held in a trust follow a trust document/agreement and the trustee of the trust follows those instructions. The document defines the type of trust, whether income and/or principal is distributed, and all other instructions and wishes of the trustor. You can contact the trustee of the trust to find out about who pays the tax.
Trust tax rates are very unfavorable and usually income is distributed to the beneficiaries of the trust on a Form K-1. This Form is added to your individual income tax return and you pay the tax on the income distributed from the trust at your individual rate. If you get a K-1 then you know you will be paying tax.
Here are some links that help explain more:
Estates and Trusts FAQs
What is a Schedule K-1 Form 1041
Navigating Family Trusts and Taxes
I hope this helps,
Joe D. CPA/PFS, CFP®
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