Legal Question in Tax Law in California

Who's family trust is it? Are you the Trustor or Settlor? Are the Trustor(s) or Settlor(s) deceased? Are you a beneficiary? Are you a borrower?

If you are the Trustor, then it is your money... so, there is no income on an investment. If you are the beneficiary, then is there a distribution to you and then you are purchasing a home? If so, then the distribution might carry out to you some distributable net income (DNI) and you would have to pay income tax on that. If there is a principal distribution, then there is no income tax on that (unless, again, DNI flows out to you).

If the Trust is making the investment, then its down payment will not be a taxable event.

Do you get that the question involves a lot of facts to be obtained and a lot of choices as to how to accomplish the goals of purchasing a home?