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My family is thinking of setting up GST trust. Is the farm

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My family is thinking of...
My family is thinking of setting up GST trust. Is the farm rental income subject to trust tax rates or can it be passed on to the beneficiaries?
Submitted: 2 years ago.Category: Tax
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Answered in 1 hour by:
11/8/2015
Tax Professional: Lev, Tax Advisor replied 2 years ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,162
Experience: Taxes, Immigration, Labor Relations
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For income tax purposes - GST trust is no different from other types of trusts.

If income realized by the irrevocable trust (including rental income) is distributed to beneficiaries or must be distributed according ti trust documents - that income is passed to beneficiaries and reported on K1 statement to each beneficiary and deducted on the income tax return of the trust (form 1041).

If however income is not distributed and is not required to be distributed - it is taxed for the trust based on trust's income tax rates.

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