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taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 478
Experience:  Licensed CPA, MA, MST with 31 years' 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.

taxmanrog :

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taxmanrog :

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

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Customer: replied 3 years ago.

The trust does not direct the annuity

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.


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