The significant differential between when the additional 3.8% tax kicks in for trusts and estates ($11,950) versus individuals ($200,000 or $250,000) can provide trustees and beneficiaries with an extremely powerful tax savings tool when determining if discretionary distributions will be made to beneficiaries. Since the threshold for trusts starts at a mere $11,950, it may be worth considering making distributions to beneficiaries to avoid this increased tax. Please contact your tax advisor to discuss this tax planning strategy in greater detail.
Written by Carli Ortiz, CPA, Manager LinkedIn Profile
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