The grantor set up a trust, income to a daughter, remainder to a grandson. To the extent that trust income is accumulated for a later distribution to the grandson, Subchapter J rules are ignored, and the income is taxed to the grantor.

Question

Quizplus · Accepted Answer

Subchapter J rules apply to the taxation of trust income, and accumulated income is typically taxed to the trust or the beneficiary, not the grantor, unless specific grantor trust rules apply.

The Grantor Set Up a Trust, Income to a Daughter