| Consumers all around the world all struggle with the | | | | beneficiary. You can find out more about living trust |
| issues of income and taxes. There are some countries | | | | tax and living trusts at |
| where the tax rates are astronomical and people seek | | | | Once this is filed, each beneficiary would be required to |
| relief in any form possible. Due to those seeking tax | | | | claim their portion of the proceeds from the trust on |
| relief, there have been rumors of using a living trust to | | | | their own individual income tax forms. As you can see, |
| avoid taxation. Many wonder is this true? Can you | | | | there is no legal way to avoid living trust taxation in |
| avoid living trust taxation by simply having a living trust | | | | some form. The taxes must be paid from somewhere, |
| and avoid paying income tax because your income is | | | | it is just a matter of where, depending upon the status |
| in the living trust? | | | | of the trust, whether the grantor is still alive, and if the |
| The overall answer is that no you cannot avoid living | | | | proceeds have been distributed or not. Remembering |
| trust taxation. Regardless of who the grantor of the | | | | that there is no legal way to avoid living trust taxation |
| trust is, there will still be taxes owed, and they must be | | | | is very helpful, do not believe sales people, or even |
| paid by the appropriate person. Now the question rises, | | | | lawyers who try to convince you that you will not |
| of who is the appropriate person. Typically, as long as | | | | have to pay taxes on the proceeds of a living trust as |
| the grantor is still alive, they claim the income from the | | | | this information is grossly inaccurate. |
| living trust, minus any appropriate expenses as income | | | | The best way to ensure that all proceeds are properly |
| on their own income taxes. This is only used as a | | | | accounted for, is to use an experienced accountant |
| taxation method if the grantor of the trust is still alive. | | | | who has experience in living trust taxation issues. This |
| The process becomes a bit more drawn out if the | | | | is your best defense against inadvertently making a |
| grantor is not alive. First scenario is that the proceeds | | | | mistake that could be quite costly. While having your |
| of the trust have not been distributed. The trust still has | | | | taxes prepared can be very costly, it will be much |
| control over all proceeds, bank accounts, property, and | | | | cheaper than any penalties, or fines that are imposed |
| anything else held in trust. If this occurs, the trustee | | | | because of a mistake. In addition, ensure that the tax |
| must file for a tax identification number, and file income | | | | professional you select, offers an audit guarantee. |
| taxes for the living trust based upon taxable income. | | | | By insisting upon an audit guarantee, the accountant |
| As you can see, there is no avoiding living trust | | | | you select will be responsible for assisting you in an |
| taxation with this method. | | | | audit if they make a mistake that causes an audit. This |
| Your other alternative, comes when the grantor has | | | | helps protect you from living trust taxation fraud, and |
| passed away, and the proceeds have already been | | | | ensure that you are filing all of the correct paperwork |
| distributed. This creates the need for the trustee to | | | | as necessary for your particular situation. With a good |
| acquire a tax identification number for the living trust. | | | | accountant, you are sure to enjoy a good experience |
| Using the tax identification number an account would | | | | with your living trust, whether you are the grantor, or |
| prepare the necessary tax papers required to show | | | | the beneficiary. |
| the proceeds of the trust being transferred to each | | | | |