The importance of fiduciary income tax planning is often over looked by fiduciaries. Proper and diligent planning can yield tremendous benefits to estates, trusts, and beneficiaries if fiduciaries are on top of income tax planning strategies, elections and deadlines. Although last year has come to a close, fiduciaries still have some tools at their disposal that they can use to minimize last year’s tax bill to estates, trusts and beneficiaries. Below are a number of considerations, strategies, and elections that fiduciaries should have on their radar as we start the new year.

Deemed Distributions From Simple Trusts

A simple trust is a trust where the income is required to be distributed currently, there are no amounts paid, permanently set aside, or used for charitable purposes, and there are no other distributions from the trust in the tax year. Because a simple trust’s terms require income to be paid currently, the income is deemed to have been paid for tax purposes even if it is not actually paid. A simple trust is therefore entitled to an income distribution deduction under Section 651 of the Internal Revenue Code when no actual distribution of income is made to a beneficiary.

Electing to Treat a Decedent’s Revocable Trust as Part of an Estate

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