Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
demitx475
Level 2

Can a beneficiary receive a "gift" from an irrevocable trust without incurring a tax on the distribution under the gift rules?

 
1 Best answer

Accepted Solutions
demitx475
Level 2

Can a beneficiary receive a "gift" from an irrevocable trust without incurring a tax on the distribution under the gift rules?

Thank you for your reply.  I was thinking that the same rules may apply to the trust as an individual.  Wanted to be sure.

 

View solution in original post

2 Replies
tagteam
Level 15

Can a beneficiary receive a "gift" from an irrevocable trust without incurring a tax on the distribution under the gift rules?

Technically, beneficiaries of a trust receive distributions from the trust which are not actually considered "gifts" as that term is used by the IRS, Internal Revenue Code, and Treasury Regulations.

 

The distributions can either be taxable (e.g., taxable interest, dividends, gains) or non-taxable (e.g., trust principal or corpus). 

 

You should always check with the fiduciary of the trust (the trustee or administrator) to be certain. Generally, beneficiaries receive K-1s which, among other things, report income taxable to the beneficiaries.

demitx475
Level 2

Can a beneficiary receive a "gift" from an irrevocable trust without incurring a tax on the distribution under the gift rules?

Thank you for your reply.  I was thinking that the same rules may apply to the trust as an individual.  Wanted to be sure.

 

Dynamic AdsDynamic Ads
Privacy Settings
v