topic Re: Property in irrevocable trust in Investors & landlords

Property in irrevocable trust

Kbird35 — Mon, 10 Nov 2025 22:14:30 GMT

I’ve been reading about how some irrevocable trusts can shift taxable income to the beneficiaries instead of paying taxes at the trust’s higher rate. My understanding is that this only works if the trust allows those distributions to be treated as part of Distributable Net Income (DNI) — meaning the trust deducts what it pays out, and the beneficiaries report it on their returns via Schedule K-1. PLS HELP…

getting different answers from everyone

Re: Property in irrevocable trust

M-MTax — Mon, 10 Nov 2025 22:38:42 GMT

@Kbird35 wrote:
PLS HELP…getting different answers from everyone

No offense but you should stop asking "everyone" who is NOT an estate/trusts attorney or similar professional with experience drafting, reviewing, and administering trusts.

Of course, a trust can work in the manner you described but it needs to be drafted and funded properly. The main issue is the trust cannot be owned by the grantor (or controlled at the grantor's discretion, among other things).

If you were to set up an irrevocable trust with an independent trustee and beneficiaries other than you, then it could work as you outlined. However, when the trust is funded, the funds transferred into the trust are treated as gifts to the beneficiaries, which could present a different issue.

Discuss your desired outcome with a qualified professional in your area.

Re: Property in irrevocable trust

Kbird35 — Mon, 10 Nov 2025 23:18:50 GMT

No offense but when I said “everyone” I meant my attorney and accountant …. Which is a little disturbing that I can’t get a straight answer or even a consistent one. Thanks for the help .

Re: Property in irrevocable trust

M-MTax — Tue, 11 Nov 2025 01:49:23 GMT

@Kbird35 wrote:
.....Which is a little disturbing...

I agree and find that a LOT disturbing. Time for a new attorney and accountant, IMO.

Re: Property in irrevocable trust

Kbird35 — Tue, 11 Nov 2025 02:46:09 GMT

Yea I think so….. I’m shocked at their lack of knowledge or lack of caring when it’s a substantial tax burden I’m looking at ….. mailing it in I guess…. Thanks