Confirm my understanding of setting up a Trust

[kenmoremmm]

I am considering setting up a trust. It would be for kids of a relative and it would be a grantor trust or revocable living trust (not sure which). The trustee would be me.

If I place an LP fund which holds an LLC real estate syndication into the trust, and the LLC fund produces income in the form of distributions and capital appreciation/gains, could the 'trust instrument' be used to direct all incoming proceeds to be invested into a bank which then places funds into a 529 plan? Further, after a liquidation event of the LP-LLC structure (5-10 years down the road), can the trust be dissolved or what becomes of it?

Further, would taxable gains be reported on my 1040 and not on a form 1041?

[former player]

Yeah but why?????

I mean, this all sounds insanely complicated, and the reason for insanely complicated is usually tax avoidance.  Is that your aim?  And honestly, are you going to be putting so much money into this trust that you are avoiding enough tax for it to be worth it?

[SeattleCPA]

Yeah but why?????

I mean, this all sounds insanely complicated, and the reason for insanely complicated is usually tax avoidance.  Is that your aim?  And honestly, are you going to be putting so much money into this trust that you are avoiding enough tax for it to be worth it?

+1

[kenmoremmm]

Yes. I am trying to eliminate dual country taxation. My understanding is that setting up the trust will be ~$1500. This amount would be saved in the first half of year 1.

[former player]

Right.  I don't think anyone here is going to be able, or want, to give you advice on using a trust to avoid dual country taxation.  You either need to be very (insanely?) confident in your own understanding of the implications or to have very good advice from someone who is a certified and experienced professional working in that very specialist field.

And possibly to put aside a pot of money to pay the taxman with if it all goes wrong at some point in the future.

Good luck.