Re: Question about 1099-B on sale of stock for a trust..

"Rick F." <rickf@xxxxxxxx> wrote:

My wife
manages (or should I say that I really do that-- she's just in "namesake")
a trust for her
nephew until he reaches a certain age (25 or whatever).. Anyway, I've been
making occasional
buys and sells on the account and have increased the overall funding
profile over the past
3-4 years.

Let's stop here for some clarification. You sound like this is Monopoly
money, but it isn't. Exactly what kind of trust is this? What does the
trust say with respect to distribution of income? Taxes? What do you mean
by "increasing overall funding"?

So.. Back in 2003 I bought for this account 100 shares of VLO (Valero
Energy) at
$38.10/share (IIRC).. I sold it last Sept for $49.26/share and my 100
shares had split over
the time into 400 shares (not bad eh?) resulting in $19690 of gross
proceeds (per box 2 of the
1099-b)...

So, I like making the money and all that sort of thing, but if I'm going
to get taxed on
any monies that are generated in this trust account -- monies that aren't
technically mine
to use certainly, why are we being taxed on these amounts?

See my questions above.

Since no monies came out of
the account (no funds were liquidated or removed from the account), but
the funds went
right back into the "sweep" fund and were put to use for some other
funds/stocks.. Is
this correct to get a 1099-B for this showing no taxes withheld?

A sale is a taxable event resulting in a gain or loss. It doesn't matter
that you reinvested the money.

The question is where the sale needs to be reported and how the tax gets
paid. The one place we know it doesn't happen is on your return. It
usually belongs on the return of the entity whose ID number is shown on the
1099-B.

--
Phil Marti
Clarksburg, MD


.

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