Children Taxable Income
March 3rd, 2010Question: Living Trust Money and Taxable Income?
My father recently passed away. He had a living trust (not a will). Left his estate/money to my mother who wants to disburse it now to surviving children.
In California, how much of this (living trust) money can we receive before we get taxed on it? In other words, could we receive, say, $20,000 and not be taxed?
Answer: These gifts to you will not be income taxable. Your mother will need to file a gift tax return on Form 709 if she gives you more than 12,000 per year each. But no gift tax will be due on the first 1 million so she can give that much without her paying - but she would have to file to prove it.
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