Googled
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Joined: 19 Aug 2009
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| Trust Fund Question? |
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So here is the deal. I am 24 and my grandparents have each been putting money into an irrevocable trust for a number of years now. When I turn 25 I am able to get half and then the other half when I turn 30. My question is has my money been getting taxed every year or am I just going to get taxed when I take out money or when the trust dissolves at 30? The trust is managed by Wells Fargo. Also should I take out half next year and do something else with it or leave it in? With the economy the "total account value" has gone down quite a bit, it did make some of that up this last quarter though. Any advice would be helpful thanks.
First time poster.
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Wed Aug 19, 2009 10:52 pm |
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oldguy
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Location: arizona
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quote:
and do something else with it or leave it in? With the economy the "total account value" has gone down quite a bit, it did make some of that up this last quarter though.
That would indicate that a large percentage of the Trust is invested in stocks - and that is where it should be between age 20 and 50. So the answer to part 1 is 'leave it where it is if you want to'.
As WF buys/sells within the trust, they have been paying capital gains tax (and harvesting the capital losses) on an annual basis. But there is probably a group of stocks that WF has held for many years and allowed to grow tax-deferred (hopefully). So you will owe 15% capital gains tax on the profit if you sell some of them. (And that's what you hope for - lots of profit). Whenever you have to pay taxes that means that you are making money!
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Thu Aug 20, 2009 6:34 pm |
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azbryanw
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Location: Phoenix, AZ
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Irrevocable Trusts are generally taxed every year as if they were a business. Assets within the trust get taxed when sold at a gain, pay an income, etc. just like normal.
You should be able to request as a beneficiary a schedule of current holdings and cost basis.
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Sun Jan 10, 2010 9:26 pm |
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