Hello, this is Rock. I'm the managing director for Estate Street Partners and today I want to talk to you about what exactly a Grand Tour type trust is. A grantor Trust is a trust agreement that is written by the grantor, who is usually the person with the money and power to manage it. The trustee manages the money for the benefit of the beneficiaries, which can include you, your wife, and your children. When it comes to a grantor type trust, it relates to the IRS exclusion of different types of trusts. The IRS recognizes various acceptable trusts, but for income tax purposes, a grantor type trust is income tax neutral. This means that the income and expenses associated with the trust are reported on your income tax return. For asset protection purposes, the trust can be either revocable or irrevocable. If it's revocable, there is no asset protection, and it is primarily intended to eliminate the probate process. Probate process occurs when you have assets in different states, and each state requires the assets to go through the courts. The courts follow the instructions in your will, or if you don't have a will, state laws determine who receives what. Estate tax comes into play at the date of death, and determines whether assets in your name are subject to taxation. There are certain exclusion laws that apply, but the estate tax laws have been changed about 38 times, and are subject to amendments. Under the IRS code, a mentor type trust is considered an excluded asset category. This means that for income tax purposes, the income and expenses associated with the trust are taxed back to the grantor. The grantor is responsible for paying taxes on the deemed income. However, once the taxes are paid, any...
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Does a grantor trust need an ein Form: What You Should Know
Trust Tax Report — Questions and Answers May 28, 2024 — However, it is possible to set up a joint tax return on a trust if you have one or more individuals with separate accounts and if the other individual trusts to report on the individual's account. For example, if both individuals Form 1040NR — 1040 Income Tax Return Oct 27, 2024 — 1040NR, Form 1040, and Form 1040A are required to be filed if income is received from a trust within the U.S. for a taxable year. Forms for the Estate Tax and Estate Transfer Tax May 4, 2024 — The individual is responsible for filing a gift tax return even if the estate is split up. The individual will claim a credit or a deduction for any gift not treated as a taxable event, such as a payment to a spouse or relatives. The individual Forms for Trusts — The Tax Adviser May 18, 2024 — Under the general rule, all trusts must file a Form 1041, which is essentially just the trust's name and address, plus it has to Exempt Your Shares of a Granter Trust from Estate Tax or Estate Transfer Tax Aug 24, 2024 — If all the individual trust's taxable income is from a separate trust that is not treated as a taxable entity (for example, no share of a trust that generates no taxable income), the trust would not be a taxable entity unless it is treated as such in the case of a taxable event. The trust will need to qualify for an exemption from the estate tax or estate transfer tax. The trust in an Active Account — The Tax Adviser Oct 27, 2024 — Trusts must not be inactive for the life of the trust. This means they must receive at least 100,000 in each calendar year in a separate account for each beneficiary.
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