Are capital gains taxed at the same rate in a trust as in an individual return?

[Kipmc7]

Are capital gains taxed at the same rate in a trust as in an individual return?

I can take an inheritance in cash or In-Kind.

If I take it in cash, the trust will sell the stocks. There will be a step up in basis to the value on the date of death. (Average of High and low). The trust will pay any taxes (at some rate) and then I get the result.

If I take it In-Kind, the stocks are transferred to my account. The trust pays no taxes. I receive the stocks and when I sell them, I will get the same step up in basis. I will pay taxes (at some rate) and keep the result.

My question is: Are the tax rates the same for the trust as for me as an individual?

 Is it the same for long term capital gains and short term capital gains?

Thank you

[ThomasM125 · Accepted solution]

The capital gain tax rates for trusts are the same as for individuals, but the income at which the trust tax rates change is much lower. For instance, trust income over $13,700 will be taxed at 20%, whereas a taxpayer filing as single will not pay the 20% capital gains rate until their income reaches over $459,750 in 2022. Income below $13,700 is taxed on estate income at a rate of 15%, whereas a single individual would pay a 15% rate on capital gain income up to $459,750. 

Short-term trust capital gains are taxed at ordinary trust income tax rates which are typically much higher than individual federal income tax rates.