I have a $300,000 that was originally put into the annuity in 2014 (inside an “irrevocable trust”), taxes were already prepaid on that amount before it was put in. The $300,000 has sat in the annuity for 10 years, earning interest (compounded) that entire time (around $85,000). I am the sole Trustee and POA (my brother and I are both beneficiaries of the “revocable” trust), we will each get a portion of the money. Everything in her "irrevocable trust" moved over to a "revocable trust" upon her death. When it is removed from the "revocable trust", whether it be just the interest or all of it, it has to be moved into an account with just my name on it (per the annuity company). Then I distribute my brother's portion to him.
My bank guy said only the interest will be taxed. I want to make sure the taxes are figured out and paid before I do any distribution to my brother. I am responsible for making sure the taxes get paid as trustee. The bank guy said it can take months to get all the paperwork done. I'm not rushing through anything, so I can do everything the right way and make sure taxes are paid first (plus, not sure what I want to roll my portion into yet).
Nothing has been touched yet. So my question is: Since my mom didn't make enough in 2024 to do taxes, would it be best to wait until 2025 to take out any interest? Bank guy said a tax return would have to be done on the interest, so it can be paid before distribution.
I don't even know where to start, help …
