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Bill
Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3153
Experience:  EA, CEBS - 35 years experience providing financial advice
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I took 67,000.00 out of a trust fund to buy my family a motorhome.

Resolved Question:

I took 67,000.00 out of a trust fund to buy my family a motorhome. Will that be reported as income that I must pay income tax on next year?
Submitted: 7 years ago.
Category: Tax
Expert:  Bill replied 7 years ago.

Is the trust revocable or irrevocable? Are you the trustee?

Customer: replied 7 years ago.
It is trrevocable and I am the trustee.
Expert:  Bill replied 7 years ago.

The tax implications of the withdrawal will depend on the type income that was generated within the trust and passed through to you and also whether the trust was terminated. For example, if the income was generated from taxable interest on bonds then you would report the income as interest on your individual tax return. Since you are the trustee, you are required to file Form 1041 and give yourself a Schedule K-1 itemizing the type of income your received. You would then report the income from the K-1 on your individual tax return.

 

http://www.irs.gov/pub/irs-pdf/f1041sk1.pdf

 

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