THE REVERE ADVOCATE – FRIDAY, MAY 26, 2023 Page 17 Revere Fire Dept. announces Alden A. Mills Point of Pines TRUST INCOME TAX RETURNS n the context of estate planning/Medicaid planning, whether you are executing revocable trusts or irrevocable trusts, it is good to know some of the basics of the income tax fi ling requirements. In the event you have executed a revocable Trust, it will be treated as a grantor-type trust and no separate tax return will be required to be fi led. If you open up a bank account or an investment account in the name of such a trust, you can have the bank or fi nancial institution simply use your social security number for 1099 reporting purposes. If you, as the Settlor of such a revocable Trust, were to die, at that point in time the trust would become irrevocable and would no longer be classifi ed as a grantor-type trust. In such an event, if the trust generates income, whether interest, dividend, capital gain income, or net rental income from investment real estate, then a separate Trust tax return would need to be fi led. Furthermore, the Trustee would have to fi le for a federal ID number with the IRS. If the Trust does not distribute its income, it will have to pay taxes at the Trust level. The highest tax bracket for Trusts of 37 percent starts at only $13,450 in taxable income. Therefore, it is often more desirable to distribute the income to the income benefi ciaries in order to claim an income distribution deduction at the Trust level to zero out the taxable income. The income will then be taxed to the income benefi ciaries who actually received the distribution on their individual income tax returns. For the 2022 calendar year, the 22 percent tax bracket for a married couple does not begin until taxable income is $83,550. The 37 percent tax bracket for the same couple does not begin until taxable income is $647,850. I Fire Station groundbreaking Residents and stakeholders invited to celebrate on Wednesday, May 31 L ast week Acting Mayor Patrick Keefe and the Revere Fire Department announced the date of the Alden A. Mills Point of Pines Fire Station groundbreaking. The celebration is set for Wednesday, May 31, 2023, at 10:00 a.m., and all residents, stakeholders and community members are welcome to join. “We are delighted to break ground on the Alden A. Mills With a Medicaid irrevocable Trust executed for asset protection purposes, a tax return would have to be fi led by the Trust under its federal ID number. The Trust should be drafted in such a way as to be treated as a grantor-type Trust. If this Trust is generating taxable income, there would then be a grantor letter issued to the Settlor/Grantor/Trustor of the Trust in order for that person to report the items of income on his or her individual income tax return. Since the irrevocable Trust is drafted to be treated as a grantor-type Trust, it does not matter if interest income, dividend income, capital gain income or net rental income is actually distributed to the income benefi ciary. Those items of income will pass through to the income benefi - ciaries of the Trust via the grantor letter and will be reported on their Form 1040. The Trust will not be paying the income taxes on the income it generates. Upon the death of the Settlor of the irrevocable Trust, the Trust will no longer be treated as a grantor-type Trust. Consequently, any net income generated by the Trust will be taxed at higher Trust income tax rates unless the net income is actually distributed to the income benefi ciaries. Navigating the tax rules pertaining to revocable and irrevocable Trusts can be challenging to say the least. Joseph D. Cataldo is an Estate Planning/Elder Law Attorney, Certifi ed Public Accountant, Certifi ed Financial Planner, AICPA Personal Financial Specialist and holds a Master’s Degree in Taxation. Discount Tree Service 781-269-0914 Point of Pines Fire Station this month,” said Revere Fire Chief Christopher Bright. “Ward 5 residents have been asking for this for more than a decade, and I’m proud to lead our department to the fi nish line. The residents deserve nothing less than the best public safety services, no matter where they’re located in the city.” Conversations around the reconstruction of the Point of Pines Fire Station began in 2019 due to the growth of the city and the need for additional safety services for Point of Pines, Oak Island and other Revere beachfront communities. A feasibility study was conducted to determine whether continued fulltime use of the station could FIRE DEPT | SEE Page 19 ~ Home of the Week ~ SAUGUS - Welcome Home to Essex Street Condos! Saugus’s newest condo complex featuring 2 bedrooms, bright and sunny corner unit, fully appliance, eatin kitchen with granite counters and ceramic tile street parking, coin-op laundry in building, intercom but move in! Super convenient location, low fee, low View the interior of this home right on your smartphone. Honor. Respect. Gratitude. We are truly grateful. Thank You. We’ll be closed Monday, May 29th in observance of the holiday. You can access your accounts using our ATMs and Online & Mobile Banking. Thank you! Professional TREE REMOVAL & Cleanups 24-HOUR SERVICE
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