Have Tax Questions? Ask a Tax Expert for Answers ASAP
Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.
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I'm sorry to hear about your loss.
When you receive funds from an irrevocable trust, it is considered income to you and is taxed at your ordinary tax rate
In terms of the annuity, the trust will handle the receipt of the 1099 and any income tax on the amount that is not passed through to beneficiaries
My research indicated that it was not considered income (federal ) therefore not taxable.
What is not considered income?
The distribution from the irrevocable trust?
There's an easy to read article on the topic.
Distributions from a revocable trust are not taxable to the recipient
but an irrevocable trust distribution is taxable
Do you have further questions?
I thought this whole thing was set up so we wouldnt have to pay taxes. Silly me. Thanks for the link. It was much earier to understand than the ones Ive been looking at.
You can certainly take a copy of your trust document to a local professional, and see what they say about the structure of the trust.
Because we can only speak in generalities
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Thanks - you can try again