With her near-sightedness, and those tremulous fingers of hers, at once inflexible and delicate, she could not be a seamstress; although her sampler, of fifty years gone by, exhibited some of the most recondite specimens of ornamental needlework.
State taxes on family trusts vary, but federal laws require family trusts to pay taxes on income it keeps but not on any that is distributed. A trust that earns $50,000 and distributes it all to trust beneficiaries pays no income tax. The beneficiaries pay income taxes on funds given to them.
Beginning in 2013, higher income individuals with net investment income are subject to a new 3.8 percent tax. The tax generally applies to individual returns with income over $200,000, but also reaches trust and estate income tax returns with as little as $12,000 of taxable income.states and trusts have a much lower threshold at which the 3.8 percent tax applies. In general, any undistributed net investment income of a trust or estate in excess of approximately $12,000 is subject to the 3.8 percent tax, as well as the new top 39.6 percent regular income tax rate.