R-First Bookkeeping & Tax Practice Can Help With Trust Taxes
Trusts are an important part of many taxpaying Americans’ financial goals. Usually those goals are about making sure a loved one has money for school, to buy property for themselves, or to invest in their career. They can also be for the person setting up the trust. Trust fund taxes are a fact of life for anyone who sets up a trust fund, and for many people who benefit from one.
Understanding Trust Fund Taxes
A trust is an agreement where one person holds legal title to some property. This person keeps or uses the property on behalf of another person. A trust is formed under state law and any income generated by the use of this property, or interest that collects on it, is subjects to taxes.
A family trust is formed when one member of a family wants to provide for other family members financially, or wants to move ahead with some estate planning goal. Family trusts are also subject to taxes.