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tax question for diane k.

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dino23

New Contributor
Sep 19, 2007
21
3
9
Southfield, MI
diane,

lets say i gained a large lump some of money (lets say 20 million) from a vehicle (stocks, sale of a business, however...). i paid the taxes on that money. then i choose to put a large portion of it in to a trust for a friend. how would the friend (trustee) be taxed on the money placed into his trust? im sure it's not the same taxiation as if i gave it to him out right, or is it? would he get the tax breaks on the money that a trust is eligible for? thanks for your time!

:thankyousign:
 

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Diane Kennedy

Bronze Contributor
Aug 31, 2007
795
209
49
diane,

lets say i gained a large lump some of money (lets say 20 million) from a vehicle (stocks, sale of a business, however...). i paid the taxes on that money. then i choose to put a large portion of it in to a trust for a friend. how would the friend (trustee) be taxed on the money placed into his trust? im sure it's not the same taxiation as if i gave it to him out right, or is it? would he get the tax breaks on the money that a trust is eligible for? thanks for your time!

:thankyousign:
Generally, I avoid "what if" questions like the plague because you can drive yourself crazy figuring out what if scenarios. But, I have an easy answer to this one, so I'll give it "It depends."

Here are some of the issues: - Friend is the trustee, you are the trustor, but who is the beneficiary? What type of trust: complex, simple, revocable, irrevocable?

A better way to approach this is figure out what you want to achieve...and without getting to personal, is this just a hypothetical exercise or does someone you know have a bunch of money and facing a real situation? If it's the later, then they need to talk to an estate attorney/CPA to get detailed information for their goals.
 

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