- Jurisdiction
- Georgia
My mom passed away recently and a REVOCABLE trust had been set up. It instructs a certain amount of money to be distributed monthly to the three beneficiaries as long as is possible, hopefully lifetime, but there are provisions to make adjustments to amount and time given changeable economic conditions. There is also a house to be sold and those funds to be distributed equally.
Anyway, I'm on social security and a subsidized health care plan so it is vital I find out not only the tax consequences, but even more importantly, are these two money distributions considered INCOME? Why? For example, capital gains are not considered income as I understand it leading to crazy things like a millionaire only receiving it can collect unemployment insurance because it isn't income.
It appears from my searches, that distributions from a REVOCABLE trust are not taxable and not income? But also, "it depends." I also found distributions from an IRREVOCABLE trust ARE taxable (and possibly "income"). I know that normally the profits from the sale of a house are also not income or taxable… (we are not talking millions here) but I was told that this money has to be run through the trust to be distributed.
Anyway, do you see my problem? I need to know if the money distributions from the estate are 1) taxable and 2) "income." The consequences are very relevant because of the limits one can earn on social security and on the estimated income for the health care subsidy. If I don't get it right I could wind up in a lot of trouble.
Side note, started taking SS at 63 1/2, and I turn 65 in 6 months… so then there will be the whole medicare thing. But I don't think this issue matters to it.
So, what do you say about (1) and (2)?
If it matters, mother lived and died in Florida.
Thanks
Anyway, I'm on social security and a subsidized health care plan so it is vital I find out not only the tax consequences, but even more importantly, are these two money distributions considered INCOME? Why? For example, capital gains are not considered income as I understand it leading to crazy things like a millionaire only receiving it can collect unemployment insurance because it isn't income.
It appears from my searches, that distributions from a REVOCABLE trust are not taxable and not income? But also, "it depends." I also found distributions from an IRREVOCABLE trust ARE taxable (and possibly "income"). I know that normally the profits from the sale of a house are also not income or taxable… (we are not talking millions here) but I was told that this money has to be run through the trust to be distributed.
Anyway, do you see my problem? I need to know if the money distributions from the estate are 1) taxable and 2) "income." The consequences are very relevant because of the limits one can earn on social security and on the estimated income for the health care subsidy. If I don't get it right I could wind up in a lot of trouble.
Side note, started taking SS at 63 1/2, and I turn 65 in 6 months… so then there will be the whole medicare thing. But I don't think this issue matters to it.
So, what do you say about (1) and (2)?
If it matters, mother lived and died in Florida.
Thanks
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