How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Stephen G. Your Own Question

Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 4020
Experience:  Extensive Experience with Tax, Financial & Estate Issues
Type Your Tax Question Here...
Stephen G. is online now
A new question is answered every 9 seconds

My parents set up an irrevocable trust for my son at least

Resolved Question:

My parents set up an irrevocable trust for my son at least 10 years ago, with a goal of paying for part of his college education. The trust consists of stock purchased by my parents in the electric utility company my father worked for, and all dividends were reinvested in additional stock purchases. We were able to fund his first three years of college from our own savings for this purpose, but needed to take a withdrawal of 200 shares of the trust (approximately 40% of the total trust) in the amount of just over $10737.40 dollars for his senior year. I do not have any more information about the trust, and would like to know what taxes my son (the beneficiary) might need to pay. He has less than $2000 of income this year from work-study, and it seems likely that he would pay the lowest rates over all. He is our dependent, and we have been taking advantage of the tax benefits for college education on our tax forms. I may be able to get more information on the trust from my parents, but they are both over 80 now, and their answers are not always clear. How do I figure this out?
Submitted: 3 years ago.
Category: Tax
Expert:  Stephen G. replied 3 years ago.

Stephen E. Grizey :

Hi & thanks for using our service. I'll do my best to give you a complete & accurate answer. Please ask me to clarify anything you don't understand.

Stephen E. Grizey :

Chances are, since the trust is irrevocable, it may have been required to file income tax returns in the past. Who are the trustees? Was the stock sold & then the proceeds distributed to your son? Or was the stock actually distributed to him & then sold? It will be necessary to determine the original number of shares contributed to the trust and their cost when your parents purchased them or the number originally purchased by the trust and their acquisition cost; as well as the cost of the shares purchased through the reinvested dividends in order to determine the adjusted cost basis for determining gain or loss. The dividend reinvestment statements will have the latter and your father's old company should have information as to his stock purchases if made as part of an employee stock purchase plan. If he purchased them through a broker or a bank, then that company should have similar records.

Stephen E. Grizey :

I suggest that you might consider getting some professional help, possibly from a local CPA, to make these computations and /or estimates with/for you, if you aren't familiar with these issues, as we have several different sources of data, that we use to obtain reasonable estimates if the actual records are not available.

Stephen E. Grizey :

It is really beyond the scope of what we can do here in terms of trying to give you specific details as we would need a lot more back & forth in order to determine the specific facts.

Expert:  Stephen G. replied 3 years ago.
What Happens Now?

Your chat has ended, but you can still work with your Expert to get an answer to your question if you have not yet received one.

Come back to this page at any time to see additional information from your Expert.  You will also receive an email when your question is updated.  If you want to send a message to your Expert, use the box below.

If you have already received a satisfactory answer to your question, click the Accept button above.  Experts are credited for each accepted answer they provide.
Expert:  Stephen G. replied 3 years ago.

Please remember to click on the Green "ACCEPT" "ICON" & thanks again for using our service.
Customer: replied 3 years ago.
Thanks for your help. I thought it might be very complicated. It sounds like the best option is to contact American Stock Transfer and Trust company (who issued the check to my son after the sale of 200 shares). They should have all of the information on the original setup of the trust and the number of shares and purchase price for each round of dividend stock purchases. Do you agree?
Expert:  Stephen G. replied 3 years ago.
I'm afraid that will only be part of the solution & I'm not sure what that company's role was in terms of the irrevocable trust. You still need to know what to do with the information & someone needs to analyze what has been done tax wise, what needs to be done, and then put together whatever filings are necessary and/or determine an alternative practical solution. In order to do that, in my opinion you will need some level of professional assistance. I can only give you my best recommendation based upon the limited information we have available. Unfortunately, it may not be as simple as simply reporting a capital gain (or loss) on your son's 2010 income tax return.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 4020
Experience: Extensive Experience with Tax, Financial & Estate Issues
Stephen G. and 6 other Tax Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.