Trust Long Term Capital Gains

[mitchden1]

My dad passed away several weeks ago. I am the Trustee. His Revocable Living Trust was converted to an Irrevocable Trust and per his Trust, I sold the assets and distributed them to his heirs. There are long term capital gains in the Trust from the date he died until I was able to sell the assets. Although it was only about 10 days, the capital gains are significant.

My dad wanted the Trust to pay any and all capital gains taxes so his heirs wouldn't have any tax liability. I understand the Trust long term capital gain rate is 20%, however, I thought there's an additional tax percentage that is added to it (~4%). Is that correct? When I file the 2022 Trust tax return, I will pay all Trust taxes from the inheritance I received.

[Anonymous_ · Accepted solution]

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@mitchden1 wrote:

I thought there's an additional tax percentage that is added to it (~4%). Is that correct? 

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Yes, that would be the NIIT (net investment income tax ). The additional tax is 3.8%.