Form 1041

[Iishakis]

I am in the process of preparing Simple Trust on Form 1041 for a new client (my 1st year preparing with Lacerte) It has not been a pleasant experience with multiple calls to support (very long hold times to speak with a non-expert in the 1041) and ultimately e-mails to higher level support. 

The current issue is relates to how Accounting Income is being computed and displayed on the worksheet (without using overrides) This trust distributes all dividend and interest income with capital gains being allocated to corpus. Unfortunately the Accounting Income worksheet does not reflect this allocation.

I spent 2 hours on the phone with support yesterday and ultimately sent the return to higher level support and received the following reply:

Thank you for contacting Lacerte email team regarding trust return. The return attached is a simple trust but not all items are being distributed there is 0 percent of capital gains going to the beneficiary. The items on the K-1 are being reduced by deductions not attributable to one class of income. This can be seen by viewing the DNI diagnostic on the forms tab. It does appear you spoke to an agent yesterday. I hope this was answered to your satisfaction. If not please advise of where the numbers you want are supposed to go.

Thank you for being a Lacerte customer!
We appreciate your business. Please let us know if we
can be of further assistance.
Sincerely,

Kenneth
Lacerte Support

Last I checked Capital Gains do not need to be distributed from a Simple Trust.

I would appreciate any feedback from my fellow practitioners. I really hope that someone from Lacerte is monitoring this message board and realizes that a program that costs $100 per return, in addition to the other 8k I spend with Lacerte every year in exchange for less and less support in unacceptable. Over the last several years the live support function has been harder and harder to access with more technical errors (it feels like practitioners are the BETA testers) while the program costs are ever increasing. 

[sjrcpa]

You are correct - capital gains are corpus and not distributable by a simple trust.

There are options as to how expenses reduce the various categories of income - tier or pro rata. Check how you have this set up.

[Iishakis]

Thanks for your quick response (I wrote while on hold for a Lacerte representative currently waiting for 56 minutes)

I have it set up, I believe properly, in screen #7. The problem that I am having now is with the Accounting Income worksheet, where for example its allocating most of the Capital Gains to Income to Income and not Corpus and Interest income from a K-1 (properly input and flowing to page #1) is not included in Accounting Income.

[sjrcpa]

You may just have to compute Accounting Income outside of the software and override the Amount Required to be Distributed.

The 1041 program in Lacerte is not their best product.

[Iishakis]

I tend to agree

They finally answered the phone and escalated my case to a Tier 2 support person who is looking into the matter. 

[BobKamman]

What do you show on Page 2 of Form 1041, Schedule B, Lines 8 or 10?  You should not have any entries there.