Legal Question in Wills and Trusts in Florida

My mother was a resident of Florida and passed on March 23, 2013. She owned a condo in Florida and a home in Rhode Island. The home in RI has since sold for approximately $179 K and the condo in Florida has recently been put on the market for sale for about $39 K. My brother is Trustee of her Trust and I am executrix. The only items in the Trust are the two pieces of property. All the rest of her estate is distributed to beneficiaries. These are my questions:

1. If the condo in Florida is not sold this year, but rented instead, would the rent then go into the Trust as income. And, if so, would the Trust be subject to Federal Income Tax ?

2. Is my mother's Trust subject to Federal Income Tax in any way ?

Thank you

Asked on 6/13/13, 7:29 am

1 Answer from Attorneys

Kevin Pollock Law Office of Kevin A. Pollock LLC

The trust will need to file a Form 1041. If any money from the trust is distributed out to the beneficiaries, it will also need to complete K-1s for the beneficiaries, and they would pick up the income. As far as the rent goes, if all the income is distributed out, then all the beneficiaries will pick up the income on their own personal returns via the K-1. If you rent the Florida property out, I would advise keeping some money in the trust to deal with repairs, taxes, etc.

Kevin A. Pollock, J.D., LL.M.

P: (609) 818-1555

Licensed to practice law in Florida, New Jersey, New York and Pennsylvania.

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The foregoing is offered for informational purposes only and is not legal advice nor does it create an attorney-client relationship. To indicate that you have read the answer it would be appreciated if you would check either the thumbs up or thumbs down box below. Circular 230 Disclosure: Any federal tax advice contained in this communication, including attachments and enclosures, is not intended or written to be used, and may not be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any tax-related matters addressed herein.

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Answered on 6/13/13, 7:59 am

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