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Lane
Lane, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 3695
Experience:  Providing Financial & Tax advice since 1986
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If an IRA beneficiary is a revocable living trust - what are

Customer Question

If an IRA beneficiary is a revocable living trust - what are the tax liabilities?"
Submitted: 11 months ago.
Category: Tax
Expert:  Lane replied 11 months ago.

NPVAdvisor :

Hi, as a revocable trust is a pass through entity, the income tax is paid by the beneficiary

NPVAdvisor :

the grantor of the trust

NPVAdvisor :

Frem a tax perspective, the revocable trust is a non entity

Customer :

My understanding of a revocable living trust - it never dies even though the trustees may

Customer :

change.

NPVAdvisor :

Does the revocable living trust become IRRevocable at death?

Customer :

I do not know since the trust document is not available to me today

NPVAdvisor :

It most likely does

Customer :

Whenci

Customer :

When I have the docum

NPVAdvisor :

This has been a gray area ... as IRS has not clarified .. BUT the most recent private letter ruling on this was in 2010

Customer :

When I have the document I will contact you. What e-mail address?

NPVAdvisor :

We are not allowed to use email here ANONYMITY is a requirement of the site ... BUT you can simply come back here......However, let me give you the most recent PLR ... that may help

NPVAdvisor :

In Private Letter Ruling XXXXXXXXX, issued on September 24, 2010, the IRA gave guidance ...

NPVAdvisor :

IF the trust says that the beneficiaries are to receive their own IRA, then they can do that - no tax at that point - (and there are some procedural requirements, like providing a copy of the trust to the beneficiaries, etc) but they have to start taking distributins each year immediately (paying tax on that money) AND HAVE TO DO SO BASED ON THE LIFE EXPECTANCY OF THE OLDEST BENEFICIARY

NPVAdvisor :

What are you trying to do ... what's the opbjective here?

NPVAdvisor :

I still don't see you coming into the chat, so I'll move us to the Q&A mode ... Maybe that will help .... Let me know of you have more questions

NPVAdvisor :

Lane

Expert:  Lane replied 11 months ago.
Our chat has ended, but you can still continue to ask me questions here until you are satisfied with your answer. Come back to this page to view our conversation and any other new information.

What happens now?

If you haven’t already done so, please rate your answer above. Or, you can reply to me using the box below.
Expert:  Lane replied 11 months ago.
Hi James


I'm just following up with you to see how everything is going. Did my answer help?


Let me know,
Lane
Expert:  Lane replied 11 months ago.
Hi James,


I'm just following up with you to see how everything is going. Did my answer help?


Let me know,
Lane

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