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Question: Are trust fund withdrawals and interest taxable?

My grandparents established a trust (designated for educational purposes) for me back in 1995. I started college in 2003 and graduated in December of 2007. During this time period I have been getting checks of about $15,000 per year to pay for educational and living expenses (the money went directly to me, not to the university, etc.) Almost all of the money in the trust account was invested in municipal bonds; however, small amounts of interest ($10-25 per year) were reported as taxable on the 1099 statements. I recently started looking at this and think I was probably supposed to include this interest income on my taxes. Is this correct? Also, am I supposed to included the whole $15,000 per year as income on my taxes as well, or even the long term capital gain? Was I eligible to take the Educational Tax Credits? My grandfather passed away recently, but my grandmother is still alive. A few years ago she made my mother the trustee of the account…not sure if that matters…

Answer: Trust can get tricky. Funds actually have to be transfered to the beneficiary so that the trust does not have to pay a whomping 35% tax on them. Simple answer, yes you should have been paying taxes on the interest and capital gains. Complex answer, your grandmother needs to see a CPA ASAP to make sure that the trust that your grandfather setup is transferred to your grandmother’s EIN or social security number. If it stays in your grandfather’s SS#, the trust will end up paying the whole tax on it,plus your grandmother could end up paying tax on it too. Please, get some professional advice as soon as possible. It’s that important.

Fitch Affirms DuPage County’s (IL) GOs at ‘AAA’

NEW YORK—-Fitch Ratings takes the following rating action on DuPage County, Illinois as part of its continuous surveillance effort:

Rich bankers bailing out rich bankers on your credit card

Question: Which of these following hobbies and interests can I use to help me make extra cash until I find a job?

I like to cook, Create investment strategies,Fix and maintain computers, do yardwork, read books on science and technology, and history, research law, I like to create graphs charts, and statistics, I like to go on long walks, I like to go grocery shopping for deals,I like spending time with elderly, I can hook up electronics, I am very energy efficient and can spot ways to be more efficient, I can file my own taxes, I like to count and roll change, I am great with credit, I love video games.

Answer: Mowing lawns could turn in a good sum. If you charged $25 or so, you could make some pretty good money. You could also be a handyman, just doing random tasks for people.

Five countries that crashed in the credit crunch face a hard road to recovery

ICELAND The decade ahead promises to chart a struggle as epic as any of the nation’s famous literary sagas. The legacy of the worst economic crisis in its history has ravaged the broader economy, trig…

1. Budget 2009—Credit Rating Upgrade