Often, there is confusion regarding the income taxation of trusts. There are two general types of trusts for income tax purposes: grantor trusts and non-grantor trusts. A grantor trust gets its status because the grantor has one of the powers listed in sections 671-678 of the Code. Some of these powers also trigger estate tax inclusion, like the power to revoke. Thus, a RLT is a grantor trust because, as its first name suggests, it is revocable. Some of the powers do not trigger estate tax … [Read more...] about Who Pays the Tax?