1041 Simple Trust

[Jerry C]

When preparing a simple trust, I have 2 beneficiaries sharing 50/50. One of the beneficiaries wants their K1 but wants to leave the other 1/2 in the trust- not giving a K1 to the other beneficiary. so obviously ProSeries is telling me the general allocation % is not 100%. how do i correct this so i can electronically file as well as only issue 1 K1?

[dascpa · Accepted solution]

Copied from my best friend Google - Simple trusts must distribute all income annually, cannot distribute principal, and cannot donate to charity, acting as a strict income pass-through. Complex trusts offer flexibility, allowing income accumulation, principal distributions, and charitable contributions.

Unless there is a provision I am not aware of, the other beneficiary cannot do what he/she wants.

[Jerry C]

I didn't think so, but it's always better to have family to help.

Thank you!!!

[sjrcpa]

Is the beneficiary telling you how he wants it also the Trustee?

Do you have the Trust Agreement? Maybe the Trustee is able to distribute to one beneficiary and not the other.