I can’t believe this is in Forbes. First, the corporation never has to pay taxes on profit made by the sale of it’s stock. The corporation didn’t make the profit, the owner of the stock did. Second, “ trust could just be a living trust that avoids probate but is not taxable” just wrong. A living trust avoids probate, but it’s just as liable for income and inheritance taxes as an individual. The only trust that isn’t would be a Charitable Remainder Trust, where the leftover money goes to charity, and is irrevocable. That’s why ultra rich people often have multimillion dollar life insurance policies in their trusts so their heirs can pay the taxes without having to sell the businesses it took them a lifetime to build at firesale prices.
Correct.
Second, “ trust could just be a living trust that avoids probate but is not taxable” just wrong. A living trust avoids probate, but it’s just as liable for income and inheritance taxes as an individual.
Not correct. This would be deemed a grantor trust, which is a disregarded entity for income tax purposes. He would be responsible personally for the tax on any trust income. Also, trusts don't pay inheritance taxes. Since it's a grantor trust the value of the trust assets would be deemed to be owned by him for estate tax purposes and would be added to the value of his estate subject to estate tax.