QUESTION
If I open a trust and have interest from investments deposited in the trust can I transfer money from my trust to a friend's trust without me pay tax?
Asked on Jun 07th, 2017 on Trusts and Estates - Texas
More details to this question:
I would want to give money from my trust to friends/family's trusts every month,want to make sure I could do this without me paying any taxes,the friends/family's would pay the taxes when they take money out of their trusts Right? If I could do this what kind of trust do i need to set up to do this?I would give myself 150k a month,one 50k a month,and 14 people 25k a month. All these except the 150k would go from my trust to their trust.i hope all this can be done with little problems. Thank you.
1 ANSWER
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I'm not certain what taxes you seek to avoid but if your trust is receiving income, I presume the investment bank will issue 1099s to the tax id associated with the account. You'll have to deal with that on your tax return if you're not paying tax on that income but have a 1099 showing investment income. You can't just shuffle the money to a different trust to avoid the income tax. In addition, if you give any one person an amount in excess of $14,000, the excess amount is subject to federal gift tax unless you file a tax return and use some of your unified credit to cover the tax obligation. I'd suggest tha tyou consult with a tax advisor to get specific advice before doing anything.
Answered on Jun 08th, 2017 at 6:45 AM