65 Day Rule For Trust Distributions 2025. Third Quarter Distributions CIRI Updated February 14, 2025 A complex trust or estate may make an election under Internal Revenue Code Section 663 (b) to treat all distributions made during a 65-day period as having occurred on the last day of the prior tax year. This 65-day rule provides an opportunity to shift income out of a trust and to beneficiaries, even if those distributions are made outside of the 2024 calendar year
Trust Distributions and Navigating the 65Day Rule Spring Street Tax from www.springstreettax.com
To qualify, the distributions must be made no later than March 6, 2025, to count as a 2024 distribution and an election is required on the tax return to receive that tax treatment. 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
Trust Distributions and Navigating the 65Day Rule Spring Street Tax
Nor will a grantor trust qualify for this 65-day rule 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. Nor will a grantor trust qualify for this 65-day rule
What is the 65day rule for trusts? Probate Attorneys NJ. 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. By making the timely election and distributing within 65 days, fiduciaries can effectively allocate income to beneficiaries and avoid tax at the trust level.
Other Tax Issues Marcia Urban Agenda Fiscal. The election is made by the trustee on the trust's tax return deadline of April 15, 2025, or September 30, 2025, for returns on extension. The 65-Day rule may help reduce income taxes for certain trusts and estates