Do Trusts Pay Taxes?

Well, they could.

In this video, I discuss two types of trust that you need to understand;

– Simple Trust

– Complex Trust

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Hi! My name’s Lou Brown. Sometimes people ask me a question, do trusts pay taxes? The answer is, they could. And the reason is because there’s two different kinds of trusts. There’s Simple Trusts and there’s Complex Trusts.

So a simple trust as identified by the IRS under code section 671 through 678. A grant or trust can be a Simple Trust, meaning that the beneficiary files the tax returns and pays the taxes. Now, if the trusts gets an EIN number, then it also has to follow a very limited tax return pointing to the beneficiaries tax return, being where the taxes are actually going to be compiled. Now, if it’s a simple trust, then it’s all relative to what the beneficiary’s tax return looks like. So if the beneficiary would have to pay taxes, then that means that money is going to have to have taxes paid on it.

Now there’s another type of trust. Now there’s about 30 different kinds of trusts. So it’s important that you understand and contrast the difference between a Simple Trust. And then what’s called a Complex Trust. Now a complex trust actually gets its own tax payer identification number. It does file a separate tax return. It’s a 1041 instead of a 1040. And it actually can file and pay taxes. Now it may have taxes, but it also may have provisions within the trust that could defer taxes until that trust liquidates. Now that could be anywhere from now to 20 years from now, or it could be passed on from generation to generation. So there’s some real huge benefits that can come from structuring your Complex Trust in a certain way that could defer taxes for literally generations to come.

I’ve got more information for you. Let’s start with I’ve got a free book for you. Also check out the website, You can learn more about my home study course. You can learn more about the upcoming event that I’ve got. This is a four day event that teaches you all kinds of different things, about Simple Trusts, as well as Complex Trusts. Hopefully this has been of help to you. My name is Lou Brown. Hopefully I’ll see you soon. Yeah, baby!