My brothers & I have a trust for a farm we inherited. Over the years we opened a TD Ameritrade account and put money in it from the farm rent proceeds. This is after tax money.
Now we would like to liquidate the Trust TD Ameritrade account. I have my own TD Ameritrade account.
If we transfer stock from the Trust TD Ameritrade account to our own personal brokerage accounts, is there a tax liability? I know the dividends received under the Trust should be paid by the Trust.
If this is a stock transfer there is not tax situation for the move. If the stock is liquidated and cash is moved to the new account then the sale is taxable to the trust since that is considered income.
are you talking about a living trust a/c - grantor trust or a trust which is required to file form 1041
It is a grantor trust. We created it to handle renting farmland and oil royalties.
a grantor trust is ignored (disregarded) for income tax purposes. the transfer of assets from it to personal accounts raises no tax issues. whatever the stock basis was in the grantor trust that's your tax basis in the new account. you'll have to watch this because many brokers will transfer in the security at market value on the date of transfer so if you were to sell the gain/loss it reports would likely be different from your actual gain/loss. you should talk to the broker about allowing you to supply the cost basis to be used.