This is a bit of a complex question. If you create a trust during your lifetime and it holds property that you used to own, and that property generates income, then you will have to pay taxes on the income on your personal income tax. In this case, the trust does not pay tax on its own.
If, on the other hand, a trust is irrevocable, meaning you can’t change it, and so this happens when the person who created the trust passes away, then the trust will have to pay taxes onthe income that is generated by the trust assets. If you have more questions about taxable income fora trust, please reach out and contact us.
Quick Question Corner is a video segment where we answer common questions about estate planning and elder law. If you have similar questions, leave them in the comment section and we can feature them in one of our videos in the future.
