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I am trying to file a final return after the sale of property. Proceeds are to go to 8 different individuals according to trust documents. Trust pays all taxes due to beneficiaries not have money to do so and family fighting Any way to file without putting in distribution percentages and beneficiary info? If i put
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If the beneficiaries don’t have any cash to pay tax on the final return, where is the trust going to get cash to pay the tax?
Slava Ukraini!
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The trust has the cash and is going to pay the taxes and then distribute the remaining funds to the beneficiaries according to the trust doc percentages. All the beneficiaries fight - so it was requested the trust takes care of all the taxes until the property is sold and the remainder gets distributed.
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If the trust has distributable income, it gets distributed to the beneficiaries on the final return. You don't tell us any dates, so it's difficult to figure out what's going on here. The property was sold in 2025, but the money has not yet been distributed? Then there are no K-1s and the percentages don't matter. Or were there distributions in 2025? Not from the property sale, but from other assets?
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I also would like to know the timeline of events.
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Property sold in 2025. Long term capital gain of over 300k. Only thing left is money in the bank account. Trustee was waiting to figure taxes to pay on 2025 return so that once those are paid the funds could be distributed. If I don’t put in beneficiary info lacerte gives me an error message because it is a final return. When I put the beneficiaries into the return with their percentages lacerte applies the capital gain amount to the k-1s according to their percentages rather than calculating it to the trust. If I don’t put in beneficiary info it calculates for the trust. Thinking if I want the trust to pay the taxes I need to make the 2026 return final. Hope this is clearer to understand!! Any suggestions?? May go back to trustee and explain option of letting capital gains flow to beneficiaries. Their distribution would be larger and they could pay taxes individually.
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Everything flows to the beneficiaries on a final return.
But since there seems to be a few hundred thousand dollars in the trust, is it earning anything? 2025 may not be final.
The more I know the more I don’t know.
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It's not a final return. Make sure they keep enough money to pay your fees for the 2026 return. And that money in the bank should be earning $1,200 a month, so there might be distributable income to beneficiaries for this year, unless you act fast. Trustee fees and your fees would be deductible, along with any state income taxes.
