Professional Documents
Culture Documents
Estates
- An estate refers to the mass of all property, rights and obligations of a person which are not
extinguished by his death
- An estate of a deceased person is a taxpayer if it will receive income during the period of
settlement or administration
- The tax imposed upon individuals shall also apply to the income of estates including:
Income accumulated or held for future distribution under the terms of the will
Income received by estates of deceased persons during the period of administration or
settlement of the estate
- When an estate is a taxpayer, a distribution of the year’s income to a heir or beneficiary is:
A special item of deduction for the estate
A special item of income to the heir
Trusts
- Trust is a right on property, real or personal, held by one party for the benefit of another
- Fiduciary means a guardian, trustee, executor, administrator, receiver, conservator, or any
person acting in any fiduciary capacity for any person
- Trust as a taxpayer
A trust is a taxpayer if under the terms of the trust the fiduciary must accumulate the
income
A trust is a taxpayer if under the terms of the trust the fiduciary may accumulate or
distribute the income, in his discretion
- The tax imposed upon individuals shall also apply to the income of any kind of property held
in trust including:
Income accumulated in trust for the benefit of unborn or unascertained person/persons
with contingent interests, and income accumulated or held for future distribution under
the terms of the will or trust
Income which is to be distributed currently by the fiduciary to the beneficiaries, and
income collected by a guardian of an infant which is to be held or distributed as the
court may direct
Income which, in the discretion of the fiduciary, may be either distributed to the
beneficiaries or accumulated
- The tax imposed on the income of any kind of property held in trust shall not apply to
employee’s trust which forms part of a pension, stock bonus or profit-sharing plan of an
employer for the benefit of some or all of his employees
If contributions are made to the trust by such employer, or employees, or both for the
purpose of distributing to such employees the earnings and principal of the fund
accumulated by the trust in accordance with such plan
If under the trust instrument it is impossible, at any time prior to the satisfaction of all
liabilities with respect to employees under the trust, for any part of the corpus or
income to be used for or diverted to, purposes other than for the exclusive benefit of his
employees. Provided, that any amount actually distributed to any employee shall be
taxable to him in the year in which so distributed to the extent that it exceeds the
amount contributed by such employee.
- When a trust is a taxpayer, a distribution of the year’s income to beneficiary is:
A special item of deduction for the trust
A special item of income to the beneficiary