If a transfer of assets into trust is complete for gift and estate tax purposes, the trust is always held to be a separate, taxable entity.The transferor will not be taxed on any income generated by these assets after transfer into trust.

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Whether the trust is considered a separate taxable entity depends on the type of trust. If it's a revocable trust, the grantor is often treated as the owner for income tax purposes, and income is taxed to the grantor. If it's an irrevocable trust, the trust itself may be taxed, or the beneficiaries may be taxed on distributions.

If a Transfer of Assets into Trust Is Complete for Gift