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posted Jan 21, 2026 5:30:24 PM

Trust issue

 

Let's say Person A creates an irrevocable trust for the benefit of Person B with Person C as trustee. Person A and Person C each sign the trust and has a notary witness the signatures, so the trust is valid. The trust includes a Schedule A, which is “a list of assets to be placed in the trust.” It lists amounts of of money in savings accounts belonging to the grantor, Person A. Now let's say Person C delays retitling the assets and they earn interest in Person A's account. Who owes tax on that interest, Person A or the trust? Does this create problems with the IRS?

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1 Replies
Level 15
Jan 21, 2026 5:34:46 PM


@ardilla123 wrote:
Who owes tax on that interest, Person A or the trust? Does this create problems with the IRS?

Person A and it's going to create problems with the IRS if Person A receives a 1099-INT (or other tax reporting statement) and does not report the interest.