Are taxes owed on settlement from trust dispute? Does the settlement agreement need any specific language to avoid taxes?
My understanding is that beneficiaries do not owe income tax on an inheritance through a trust. I am receiving a settlement from a trust dispute (arising out of my claim that I was a beneficiary). Do I need anything specific in the settlement to ensure I don't owe taxes on it? The trust did not earn any income. Will I need access to any trust documents for tax purposes?
Answer
It's typically not subject to income tax unless you are receiving some of the trust income as part of the distribution.
No comments:
Post a Comment