That is how it works.Not questioning if your right, I do not know so I will assume your correct. Does bring up a question though if the Trust pay out $47K to 4 separate beneficiaries this year do they all pay 12% taxes (assume all single)?That is only true if the money is left in the trust.
If the money taken out of the IRA is distributed to the beneficiary, instead of being left on the trust, then the tax obligation is passed to the beneficiary as well, and they would pay the same rate as if the IRA was their own.
Because the Tax bill on $188k to a single filer would be 41K into the 24% and 53K into the 22% brackets, sounds like Uncle Sam gave up another loop hole if that how it works.90K way "under taxed" seems like the IRS would want more.
90K way "under taxed" seems like the IRS would want more. 
Not really different than when an employer pays 4 people $X instead of paying one person $4X.
Also, it's already a "loop hole", in that if it was left in the trust, most of it would be taxed at 37%.
Statistics: Posted by marcopolo — Fri Apr 05, 2024 3:30 pm — Replies 39 — Views 2667