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I have a question regarding - a property that has been

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willed to siblings that is...
I have a question regarding - a property that has been willed to siblings that is producing income for about eight years ? How to set up trust so each sibling can be taxed individually for their income ?
Submitted: 2 years ago.Category: Tax
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Answered in 13 minutes by:
8/1/2015
Tax Professional: Robin D., Senior Tax Advisor 4 replied 2 years ago
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15,880
Experience: 15years with H & R Block. Divisional leader, Instructor
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Hello,

Actually, the trust is not required for each person to report their own income from the property. If this is rental, each person that owns a portion reports their own Schedule E with the % of rent and expenses based on their % of ownership.

An attorney can assist you in setting up a family trust if you wish the trust to hold the property. Transferring properties into family trusts is usually a simple process that involves signing a deed.

Federal tax law requires family trusts to pay taxes on income it keeps but not on any that is distributed. A trust that earns $50,000 and distributes it all to trust beneficiaries pays no income tax. The beneficiaries pay income taxes on funds given to them. The trust would need to make certain that all is distributed.

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