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Koss or Burke - More Trust Issues

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    Koss or Burke - More Trust Issues

    Burke & Koss - More Trust Questions

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    Still working on trust return and hoping you can provide some clarification for me. I have more info on trust. The trust was set up as beneficiary of IRA's per trustee, but I do not have anything in writing specifying that info. Basically, the trust states that once taxpayer dies, assets are to be disposed of and split between two minors to be held in two separate trusts for minors. However, taxpayer died in 2009, new trusts were not set up until 2011 and 1099-R's were issued in 2010. The will stated that approximately $35,000 of assets were to be paid to three family members and that is what the funds from the 1099-R's were used for. There were also some stocks sold in 2010 with a gain of $8,000. The questions I have are:

    1. When someone dies who has a living trust, does the living trust change to a testamentary trust until all assets are disbursed? Nothing is stated in trust document regarding complex or simple and no direction on capital gains. Or would attorney have to create a testamentary trust at date of death?

    2. Trust had $55,278 in income in 2010; unsure if the $35,000 that flowed through to family members should be carried to Schedule B (Income Distribution Deduction) and K-! need to be generated. If trust does not direct, how do I determine? The $35,000 came from IRA income.

    Any help would be greatly appreciated.
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