Income Taxation of Estates and Trusts
By contrast, the 2005 tax rate schedule for estates and trusts (not found in the text of the statute, but in IRS publications), provides for relatively high marginal tax rates on relatively low levels of income:
| If taxable income is: | The tax is: |
| Not over $2,000 | 15% of taxable income. |
| Over $2,000 but not over $4,700 | $300.00, plus 25% of the excess over $2,000. |
| Over $4,700 but not over $7,150 | $975.00, plus 28% of the excess over $4,700. |
| Over $7,150 but not over $9,750 | $1,661.00, plus 33% of the excess over $7,150. |
| Over $9,750 | $2,519.00, plus 35% of the excess over $9,750. |
Source, Internal Revenue Service, Year 2005 Instructions for Form 1041, U.S. Income Tax Return for Estates and Trusts, at page 23.
Changes to the tax code are frequently aimed at the provisions of IRC ยง1, with adjustments being made to the percentage of income taxed in each category, and the dollar amounts which trigger a higher level of taxation.
Read more about this topic: Internal Revenue Code Section 1
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