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Tax Law (Questions About Taxes)/Distribution of money from trust after death of the grantor

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Question
My father, who had set up a standard type revocable living trust, died last year.  After his death, all the assets were gathered to the trust bank account and the money distributed to the beneficiaries, his 6 children.  I wished to give some of my money to my children since they need it more than me.  To simplify things, the money, $20,000 each, was sent directly from the trust bank account to them instead of me.  Since I was essentially giving the gift to them, I had planned to file a gift tax return to report the gift and split the gifts with my husband. If this is not correct, who would report this?  No one is going to actually pay any tax but don't want to create a problem.  Wish this had been done differently.

Answer
Mary,

Thanks for your question.

Since you directed where the funds were to be distributed, it is treated as a distribution to you as an inheritance. And a gift from you to your kids. Since you are utlizing gift splitting, you are correct in filing a gift tax return, but no tax.

Hope this helps.

John Stancil, CPA

Tax Law (Questions About Taxes)

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John Stancil, CPA

Expertise

I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

Experience

I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

Organizations
FICPA, NATP, NCPE Fellowship, Lakeland Business Leaders

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The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

Education/Credentials
DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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