Living Trust Money and Taxable Income?

Question

My father recently passed away. He had a living trust (not a will). Left his estate/money to my mother who wants to disburse it now to surviving children.

In California, how much of this (living trust) money can we receive before we get taxed on it? In other words, could we receive, say, $20,000 and not be taxed?

Answer 1

These gifts to you will not be income taxable. Your mother will need to file a gift tax return on Form 709 if she gives you more than 12,000 per year each. But no gift tax will be due on the first 1 million so she can give that much without her paying - but she would have to file to prove it.

Answer 2

Your father's assets were in the living trust and he passed away. Assuming you have taken care of any federal and California estate taxes then any distribution from the trust would only be taxable to the extent that the assets in the trust earned income. If there is some interest income each child would pay tax on their share that they receive but the largest portion of what you get is income tax free both federal and state. The amount you receive tax free is based on what your share of the trust is but it can be any amount up to millions.

Answer 3

Your have faith fund sent you a 1041 ok-a million each 12 months. on an identical time as to procure $1250 a month, curiously a number of it replaced into important. ($1250 circumstances 12 months is $15,000 and if it have been all earnings could maximum particularly have been taxable--the different clue is you admit you ran out of money and that in basic terms takes place in case you dip into important.) The ok-a million alerted the IRS to any earnings. Had you owed, you maximum particularly could have heard from them. Worst case, they could no longer discover you. You report the W-2 now and the will replace their information to the present handle. the authentic subject is which you probably did no longer have a job. those people who labored from 21 to twenty-eight would have 7 years of earnings historic past on the SSA greater desirable than you. i'm nearing retirement. Retirement relies on your remarkable 35 years of earnings historic past. If I had in basic terms labored, say, 25 years, i could have 10 years with 0 earnings and that hurts the conventional used to calculate your advantages.

Answer 4

Your mother can gift up to $12,000 per person every year tax free starting 2007, but how that would work with the trust I can't say.

Have her talk to an accountant regarding the tax ramifications.