If $100,000 cash was left in a testamentary trust for the benefit of 1 adult child beneficiary and that beneficiary received the entire amount as a distribution from the trust would they pay tax on this money on their personal income tax return?
Depends on whether it was all capital, or included an income component.
The trust has to issue a tax statement explaining the components of the distribution.
Depends on whether it was all capital, or included an income component.
The trust has to issue a tax statement explaining the components of the distribution.
Thanks so much for your reply Bruce4tax!
If the distribution from the testamentary trust is only capital (cash) and has no income component, is there a scenario in which this capital distribution to a beneficiary could be taxed?
Maybe if the trust deed defines capital gains as capital rather than income.
You should be asking the accountant who does the trust's tax return.
The trust has to issue a tax statement explaining the components of the distribution.
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