Capital gains may be trapped inside your trusts
Abstract: Many families today are attempting to reduce their tax bills by distributing trust income to beneficiaries in lower tax brackets. But it’s not always possible to distribute capital gains. If long-term gains remain “trapped” inside a trust, they’ll be taxed at rates as high as 23.8%. But this article discusses steps that might be taken to liberate capital gains from a trust and shift the income to beneficiaries.