65 Day Rule For Trust Distributions 2025. What is the 65day rule for trusts? Probate Attorneys NJ The 65-day rule under Internal Revenue Code 663 (b) allows trustees of a trust to treat distributions that are made within the first 65 days of the trust's tax year as if they were paid or credited on the last day of the preceding tax year 65-Day Rule: The Tax Code also permits some planning during the first 65 day of the calendar year, where the trustee can make distributions via an election that will count toward the prior year's distribution to the trust beneficiary from the trust
Did You Know? "65Day" Rule WilkinGuttenplan from www.wgcpas.com
Under the Internal Revenue Code's 65-day rule, calendar-year trusts have until March 6, 2025, to distribute trust income to beneficiaries equal to the greater of the trust's accounting income or its distributable net income (DNI) for the year and treat those amounts as if they were made on the last day of the previous year. To determine if this election is optimal, there are many considerations advisors and trustees must make.
Did You Know? "65Day" Rule WilkinGuttenplan
In most years, including 2025, the last day to make a distribution count toward the previous tax year is March 6. One of the tax planning tools available to fiduciaries of estates and non-grantor trusts is the 663 (b) election, also known as the "65-day rule." Simply put, a 663 (b) election allows distributions made to beneficiaries within 65 days of year-end to be counted as prior-year distributions. For 2025, any distributions from January 1, 2025, to March 6, 2025, will count as a 2024 distribution if this election is made by the trustee
New Tax Rules for Trust Distributions What You Need to Know HBA. By making the timely election and distributing within 65 days, fiduciaries can effectively allocate income to beneficiaries and avoid tax at the trust level. In summary, the 65-Day Rule offers fiduciaries a valuable tool for managing the taxable income of a trust and optimizing the income distribution deduction
30 June Trust Distributions Section 100A and other integrity rules. The 65-day rule under Internal Revenue Code 663 (b) allows trustees of a trust to treat distributions that are made within the first 65 days of the trust's tax year as if they were paid or credited on the last day of the preceding tax year For example, a distribution of $700 of trust income by the trustee to a beneficiary on January 20, 2025, can be treated as having been made in the 2024 tax year or the 2025 tax year