my dad has about 75 thousand in a trust that also has my name on it that i get taxed on every year. he says because it makes money here and there and reinvests itself as well as him taking money out and putting it back in later. he always paid the taxes for me on it which was about 2 grand a yr. he claims that i dont have access to this money and i beleive charles schwab confirmed it when i tried to check the balance one day, (although i didnt get pushy about it). We recently had a falling out though and are no longer on speaking terms. my question is this, how can i be taxed on money that i dont supposedly have access too? it doesnt seem right and i dont want to get stuck with the 2 g's in taxes especially if i cant even touch this money thats being taxed in my name. by law, if im being taxed on it, do i have access to it?
He's wrong. If the trust retains the income then it is taxed directly to the trust. If the trust pays out to the beneficiaries, then the income gets passed out to the beneficiaries. If the income is supposed to be paid to you under the trust terms, then yes it is taxed to you, but you should be receiving that income. Might be that you are not getting what you are entitled to under the trusts' terms. In any case, something doesn't up with what you're being told. Are you getting a K-1 form each year? Do you have a copy of this trust?
i dont have a copy of the trust but every time the stock statement comes it always is addressed as the bradley davis trust heritage , which is my name but it also has his name on it. and its a regular stock statement that goes up and down each month. i dont beleive im getting a "k-1" as i just give him the w-2's from my work each yr and he always files it in relation to the stocks. i never receive a refund however and i do know that he dips into it from time to time but usually puts money back in. i get taxed on it though which he pays. i do know that when i asked him if i could call schwab on my own to check the accnt from time to time he got very pissed and threatened to close the accnt. maybe hes up to something?
Is this funded thru his stock program at work ? Thats the way my family was setup. It is funded thru stock payments from the company to the trust. Those stocks go up, pay dividends ,etc that i guess is where the tax comes in...
If thats the case, with ours you dont have to die to start recieving access to it just retire past a certain age...
Your in it looks like the same situation ive been in for 7 or 8 years now....You know the moneys there, your afraid its not being amnaged properly but you have no way of demanding knowledge without offending someone.....Its a really tough situation. Its not YOUR money yet but some day it will be but yet you cant control a damn thing about any of it.....
If thats the case, with ours you dont have to die to start recieving access to it just retire past a certain age...
Your in it looks like the same situation ive been in for 7 or 8 years now....You know the moneys there, your afraid its not being amnaged properly but you have no way of demanding knowledge without offending someone.....Its a really tough situation. Its not YOUR money yet but some day it will be but yet you cant control a damn thing about any of it.....
he doesnt work, he played the market using his inheritance, but he set aside 75 or so for me. i dont mind offending him as we are no longer on speaking terms. someone suggested in another forum that he was just trying to use me for my lower income tax bracket as i only make about 25 a yr. the stocks do go up and down and pay dividends and what not but that just gets reinvested, he does take money out from time to time and im thinking he uses my tax bracket so he doesnt have to take a bigger hit on his bracket, thats why he pays the taxes on my return for me im assuming. my question is, can i get that money for myself? since hes prob gonna cut me out of will i want to at least get something, especially since i havent received a tax refund in 10 yrs .
You would probably be wise to consult an Estate Attorney in your area.....As far as taxes, i know that the Trust may have tax liabilities but as far as I know ( again the reason you may want legal advice) you should not have anything on YOUR PERSONAL income tax statement.....
Another bad thing is if you have to wait till his death to collect you look at giving Frank/Dodd/Sohereto about 60-80% before you ever see a dime....
Another bad thing is if you have to wait till his death to collect you look at giving Frank/Dodd/Sohereto about 60-80% before you ever see a dime....
The only way you can be taxed on trust income is if you actually receive it or if you are legally entitled to receive it under the terms of the trust. If the trust retains the income, then the tax should be paid from trust assets. If the income is paid to someone else, then they should pay the tax.
Partnerships and S corps work differently, those you could be taxed. But not a trust.
I am entitled to receive it when he dies. Just didn't know if I could get my hands on it now as I'm being taxed on it now as he's using my tax bracket to dip in and out of it. Plus I'm afraid all these yrs I've been paying taxes on it will amount for nothing if he decides to take it all out.
