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taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Tax
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Experience:  Licensed CPA, MA, MST with 29 year's experience. Teach Accounting and Tax courses at Masters level.
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deceased individual has a trust. deceased had an annuity that

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deceased individual has a trust. deceased had an annuity that trust is the beneficiary. Year of distribution does the trust pay the tax on the taxable portion of the annuity or the other beneficiary share the tax due. One of the other beneficiary is a nonprofit. There is no direction in the trust document to who gets certain portion of the estate.
Submitted: 1 year ago.
Category: Tax
Expert:  taxmanrog replied 1 year ago.

taxmanrog :

Welcome to Just Answers! Thank you for giving me the opportunity to assist you! I will do my best to help!

taxmanrog :

The trust document is silent as to how the annuity is to be distributed?

taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 389
Experience: Licensed CPA, MA, MST with 29 year's experience. Teach Accounting and Tax courses at Masters level.
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Expert:  taxmanrog replied 1 year ago.
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Customer: replied 1 year ago.

The trust does not direct the annuity

Expert:  taxmanrog replied 1 year ago.

I have switched to the Q & A format, as it is easier to understand.

 

Normally, the trust document states how the annuity is to be distributed. If it does not, then the Trust takes the distribution. However, to avoid tax (trusts pay tax at a higher rate than individuals) the trust can distribute the income to the beneficiaries, and the beneficiaries then can pay tax on their own tax returns. On the Form 1041, the trust will get a deduction for the payments it makes to the beneficiaries.

 

I hope that this answers your question! If you have any more, please feel free to ask! If you have found my answer to be helpful, please rate me highly! I would appreciate that!

 

Thanks again! Have a great day!

 

Roger

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