[Chuck4121]

Tax liabilities of CD's cashed by beneficiaries of trust

[AK lawyer]

Please ask a question, using a sentence.

And if the CDs were in the trust, how did the beneficiaries get ahold of them?

[Chuck4121]

Death of my father (owner of trust). I am now the executor

[AK lawyer]

Death of my father (owner of trust). I am now the executor

Ok, you are now saying that you are the executor of your father's estate. Have you been appointed executor by the probate court? There is a difference between a trust and a probate estate.

Are you also the trustee?

And again, what is it you want to know? Are you asking whether the trust or the estate will have to pay estate or capital gains taxes on these CDs? You really need not speak with an attorney or accountant who can look at the specific details of your situation.

[Chuck4121]

I did not do a good job explaining. I am the trustee of the trust. There are 2 beneficiaries (myself and one other). The CD's were placed in the new trust account after the death of my father, then distributed according to stipulations. My question is where does tax on interest from cashed CD's land upon. My father's tax return, the individual beneficiaries tax return or the new established account set up to distribute funds? All court documentations have been completed and recorded.

[AK lawyer]

... My question is where does tax on interest from cashed CD's land upon. My father's tax return, the individual beneficiaries tax return or the new established account set up to distribute funds? ...

As I say, you should double-check with a tax professional to be sure, but I think your father's estate would be liable for the interest which was earned up to the time of his death, and the beneficiaries would be liable for their pro-rated shares of the interest thereafter. As trustee, you are obligated to file an informational return.

A distribution account is not a tax paying entity. As trustee, you would be responsible to account for that.