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Income Taxation Of Trusts And Estates - Grantor / Non-Grantor Trusts

Grantor/Non-Grantor Trusts

Grantor Trust:

  • Not considered a separate entity.
  • Grantor retains certain powers or ownership interests.
  • Income, deductions and credits are reported on the grantor's individual tax return.
Non-Grantor Trust:

  • Trust is treated as a taxable entity.
  • Assets treated as being owned by the trust.
  • Trust is responsible for the tax consequences of income, deductions and credits.
  • Separate tax return is filed on behalf of the trust.
"Inter-Vivos Trust" A trust created during the trustor's lifetime.

"Testamentary Trust" A trust established in the trustor's will.

Simple / Complex Trusts
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