New tax law may lead to double taxation on trust income

Lawyers warn a new tax law may cause double taxation on trust income. A congressional tax guide suggests trusts could be taxed on income distributed to beneficiaries, contrary to historical practice. This could affect trusts with as little as $16,000 in income. The issue stems from a deduction limitation in the "One Big Beautiful Bill Act," potentially impacting charitable giving and requiring trusts to sell assets or reduce distributions.