Revocable Living Trust

[eagle20]

I've recently found out that I am the beneficiary in a Revocable Living Trust (RLT). The Trust is funded with bank accounts and CD's from one financial institution -- totaling under $100,000.
Once this money is received by me do I pay any kind of tax on it? Does it get included in my 1040 filing? My state tax filing? Does the total amount get taxed or only the interest accrued since the death of the Grantor of the Trust?
And, would this be considered an inheritance for tax purposes? Any info would greatly help.

 

[seniorjudge]

Is the person who made the trust still living?

 

[eagle20]

No, sir, the grantor has passed on.

 

[seniorjudge]

No, sir, the grantor has passed on.

The feds will get some of your money.

Since you didn't give us your state, no one can answer that one.

 

[eagle20]

thank you -- I figured as much -- that there would be a tax (I recently did some research regarding Federal K-1 and Schedule E -- as far as the State goes -- NY -- I have not yet started researching. I thought inheritances (up to a certain amount) were tax free on all levels (after all, this money was already taxed); what I've learned is that "Trusts" are governed by their own rules -- this teaches me a lesson for the future when I draw up my own paperwork for my beneficiaries. Once again, thanks for input.:yes:

 

[seniorjudge]

thank you -- I figured as much -- that there would be a tax (I recently did some research regarding Federal K-1 and Schedule E -- as far as the State goes -- NY -- I have not yet started researching. I thought inheritances (up to a certain amount) were tax free on all levels (after all, this money was already taxed); what I've learned is that "Trusts" are governed by their own rules -- this teaches me a lesson for the future when I draw up my own paperwork for my beneficiaries. Once again, thanks for input.:yes:

Trusts are not inheritances (as you found out).

 

[eagle20]

You bet -- thanks again.