ongoing trusts

Trust Tax 101

Trusts are considered a kind of business for tax purposes. They have their own tax ID and will receive their own 1099s from whatever assets they own.

In most businesses, the owners choose how the business’s income will be taxed when the business is set up. Most small businesses are set up as “flow-through” entities, meaning that if the business earns income, the owners pay the taxes in proportion to their ownership. The business files a tax return, but does not pay any taxes. Most large corporations are taxed at the corporate level, meaning the company pays all taxes on its income. The shareholders only pay tax to the extent they receive a dividend from the company.

In trusts,

Trust Accountings for Ongoing Trusts

Our office routinely assists trustees in preparing accountings for ongoing trusts. This post explains what those accountings are and why they are important. It also gives some advice for trustees on making financial reporting as easy as possible.

Trust Accounting Basics

An ongoing trust is an arrangement under which one person is managing money for another according to a governing document. The person managing the trust is the trustee, and the person they are managing for is the beneficiary. The governing document explains how the funds are to be used.