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ron2hoff
New Member

If I receive gift from of, say, $100,000 from a trust for a deceased, do I have to pay tax on it?

 
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dmertz
Level 15

If I receive gift from of, say, $100,000 from a trust for a deceased, do I have to pay tax on it?

A distribution from a trust is not a gift.  Whether or not the distribution is taxable depends on whether or not the distribution includes net income of the trust received during the trust's tax year or is just a distribution of corpus (money already in the trust, not income to the trust such as interest).  If the distribution includes distributable net income, the portion of the distribution that is income will be reported to you on a Schedule K-1 (Form 1041), making the income taxable on your personal tax return.  Ask the trust trustee how much taxable income will be reported to you on the Schedule K-1.

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3 Replies
macuser_22
Level 15

If I receive gift from of, say, $100,000 from a trust for a deceased, do I have to pay tax on it?

If coming from a trust of a deceased then it would be an inheritance and not a gift.    If from a tax deferred account then it may or may not be taxable.   Have you received a form reporting the money such as a 1099-R or a K-1?
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
dmertz
Level 15

If I receive gift from of, say, $100,000 from a trust for a deceased, do I have to pay tax on it?

A distribution from a trust is not a gift.  Whether or not the distribution is taxable depends on whether or not the distribution includes net income of the trust received during the trust's tax year or is just a distribution of corpus (money already in the trust, not income to the trust such as interest).  If the distribution includes distributable net income, the portion of the distribution that is income will be reported to you on a Schedule K-1 (Form 1041), making the income taxable on your personal tax return.  Ask the trust trustee how much taxable income will be reported to you on the Schedule K-1.

Texas Roger
Level 15

If I receive gift from of, say, $100,000 from a trust for a deceased, do I have to pay tax on it?

Gifts received are not taxable and are not entered on your tax return unless they were in a tax deferred account of some type.

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