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your instincts are good,
... don't know why they want to include this that way, however, trustee fees should be a deduction for the trust anyway
Now, the gift BACK unless it's more than 14,000 would not be taxable from a gift tax perspective
it' woulod, however be on the K-1, if the trustee want tot include it on the distribution
sorry for the typos it "would,." however ... "wants to" include it ...
I believe he wants it this way to avoid his fee as taxable income. I'm afraid if I agree, this will come back to haunt me
ahhh, yep .. no it will only haunt you to extent of a little bit of YOUR taxable income
I was told that the distribution is not taxable to me since it is from an irrevocable trust. How would this affect my taxable income?
but nothing from a gift tax perspective AND only taxable to the extent that the dist IS taxable
ok , sorry looks like our posts crossed
It depends on what the distribution is from
it's not that is from an irrevocable trust it's that the income probably is not taxable as it's coming from principle
In THIS scenario it makes ... neither of you wold pay any tax
the entire trust was invested in stocks, etc, and yes, the majority of the distribution is from principle. There is only a wee bit of interest income, but (again, as I'm told) not enough for there to be a capital gain. So, there should be no harm in getting a K-1 stating one amount, but I am truly receiving an amount less than what is stated on the K-1
:) you're right ... BUT what you gift to someone else is your business
and I'm guessing it's not enough to be taxable from a gift tax perspective
you ARE receiving it ... you're just making a gratuitous gift with part of it
YW, .. very astute, you are
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I guess my real issue is being concerned that this will haunt me a few years down the road
and that I will get fined for back taxes on an amount I never received
NO.again your response (should it arise, and I truly believe that it will not) should be the truth ... you gave this to this person and did not have to. I WOULD... most definitely make the trustee give a check for the full amount (that's your documentation) THEN, again, what you do with that money is your business
Again you ARE astut if the trustee is asking only to pay you the net amount
thank you for letting me bounce this off. I've surfed the web for a week now trying to find an answer. I appreciate your time. Thank you.
You're very welcome
Let me know if I can help further
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