In a family trust ,is money paid out too the beneficiaries taxable?and if so at what tax rate?

Answer 1

If the pay out is from principle that had already be taxed there may not be income tax to the recipient. Most other circumstances would result in tax to the recipient. The tax rate would depend on the type of income and the tax situation for for the recipient without the trust money.

Answer 2

Depends on what the trust has investments in, but usually yes if the money paid to the beneficiaries is from any type of income then yes it is taxable to the individual. The beneficiary should get a K-1 from the trust outlining what type of income they received. This is assuming that the trust is a complex trust that is allowed to make income disbursements to the beneficiaries.

Answer 3

Generally yes. You'll get a Schedule K-1 that identifies the type(s) of income. The type of income may determine the tax rate. If it's dividends, interest or ordinary income it's taxed as such. If it's long-term capital gains then it's taxed at that rate -- 15% for most taxpayers.