Legal Question in Wills and Trusts in California
I live in a small home on property that I inherited by way of a trust. I am the executor of the trust. If I lease part of the land, the income will be paid directly to the trust. Will the trust be responsible for income taxes on that money? The total amount would be about 40K per year.
3 Answers from Attorneys
Your question is missing several facts to give you a specific answer to your question. I can answer you in general terms. If the trust owns the land and the house then the income from leasing part of the land goes to the trust and the taxes are paid by the trust. This assumes there is only one beneficiary and the trust gives you the right to live on the land without paying rent.
Mr. Weinstein is correct. I would also add that when the original settlor of the trust passed away, the trust should have gotten its own Taxpayer Identification Number at that time.
This does not make sense.. can't say for sure without seeing the documents, but most likely the trust should have been terminated by now. You should have an attorney review the documents.