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.
Trust Income. An education trust fund may be created to pay income to the beneficiary. The trust fund disbursements are taxable to the beneficiary. Any income accumulated by the trust for the tax year but not distributed to the beneficiary is generally taxable to the trust.The principal amount in the trust is not taxable.he trust fund disbursements are taxable to the beneficiary. Any income accumulated by the trust for the tax year but not distributed to the beneficiary is generally taxable to the trust. The principal amount in the trust is not taxable.