21-Year Trust Deemed Disposition Calculator

A trust doesn't get to hold appreciating property forever without paying tax on the growth. Every 21 years, the clock resets, whether the trust distributes anything or not.

Reading This Tool

How To Use This Calculator

Enter the trust's current asset value and cost base, how many years remain until the 21-year anniversary, and expected growth.

Trusts are taxed at the top marginal rate on all income, with no graduated brackets. Projecting the asset value forward to the anniversary date shows the tax bill a distribution well before that date would actually avoid.

Your Inputs

Current FMV Of Trust Assets $3,000,000

Adjusted Cost Base Of Trust Assets $500,000

Years Until The 21-Year Anniversary 8 yrs

Expected Annual Growth Rate 6.0%

Trust Top Marginal Tax Rate 53.0%

Distributing capital property to beneficiaries before the 21-year anniversary generally transfers it at cost, deferring the gain until the beneficiary eventually disposes of it, and shifts future taxation to the beneficiary's own, likely lower, marginal rate.

Projected Tax At The Anniversary

Projected Tax Liability At The Anniversary

Projected FMV At The Anniversary

Projected Deemed Disposition Gain

Trust Asset Value Growing Toward The Anniversary

Certain trusts, including most spousal and alter ego trusts, have modified timing rules tied to the life of a beneficiary rather than a flat 21 years. Confirm which regime applies to this specific trust before relying on this projection.

Planning a distribution well ahead of the anniversary?

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