Trusts and Trust Taxation

Trusts as Taxable Entities

A trust is a legal arrangement in which a trustee manages property for beneficiaries. Many trusts are separate taxable entities and may owe income tax on income retained within the trust.

Grantor.
Trustee.
Beneficiary.
Trust income.
Distributable income.
Separate tax reporting.

Note

Trust taxation differs significantly depending on whether income is retained or distributed.

Summary

Trusts may function as separate taxpayers while administering property for beneficiaries.