January 16, 2014

Tax Planning for Trusts with the 65 Day Rule

“The ‘65 Day Rule’ allows a trustee to elect to make a trust distribution within 65 days of the end of the preceding tax year and effectively transfer some of the income and its tax liability from the trust to the trust beneficiary who received the distribution.  Utilizing this rule can provide a significant tax savings to the trust, possibly at a lower tax cost to the beneficiary.”

Horizon Advisors, our sister firm, explains the benefits of the election of the 65 Day Rule and how the best tax results can be achieved this year with considerations of significant savings. Check it out here.

Pro-tips:

It is wise to make these decisions as early in the New Year as possible in order to ensure you remain within the confines of the 65-day rule.

Be mindful. The distribution could push a beneficiary into a higher tax bracket, based on their AGI, so it is advisable to first calculate a trusts’ taxable income during this 65-day window.

The Maddox Thomson team is always here to help.

Call or email us at [email protected].

Maddox, Thomson & Associates

Maddox, Thomson & Associates

MTA is a full service, privately held CPA firm established in 1985 in Houston, Texas. Built on a reputation for client service, the firm delivers tax-compliant solutions through its financial planning, tax preparation and consulting services.

With more than 30 years of experience, our team of seasoned professionals will help you define personal and professional financial goals and establish strategies to maximize achievement.
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