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Old 05-29-2009, 08:39 AM
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Somewhat double tax:interest from trust investments? Timing on when realized?

Dad passed away and had revocable trust. Simple successor type and with mom gone I am now trustee. I have 3 other siblings that are also beneficiaries of the trust. If we sell the CD's, stocks, bonds that are in the trust, the gains and losses are listed on the Trust's 1041. Then ¼ will go on the K1 to each of us individually. For the year if the trust hits in the 25% bracket because let's say it makes $3500 in interest, does the trust pay tax on the interest from the CD's stocks and bonds, and each of us with our K1 pay tax again on our individual returns at our individual rate on the ¼ of the interest we received?
Similarly is there also a tax rule about whether we as individuals can claim the loss on our individual returns while the trust is open? That is does the trust have to be closed and have filed its final return before any of us individuals can realize the gain/loss on our individual returns? Thanks in advance.



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