Form 1041 Complex Trust Final Return Distributions

[quigs]

I am filing the final Form 1041 for a complex trust that terminated in 2021. There are three beneficiaries. The trust had about 10k in dividends and about 200k in long term capital gains for the year. Per IRS regulations, all income from a complex trust will distributed to the beneficiaries in the final year.

I have selected Final Return on the Form 1041 in Proseries, The program refuses to distribute the capital gains to the beneficiaries regardless of what I put in Schedule B or under Trust Accounting Income or on the Schedule K's (On the Beneficiary's Allocation Smart Worksheet). What am I missing? I can get the capital gains to end up on line 4a of each individual K-1, but the capital gain is still taxed at the trust level on Form 1041.

Any thoughts would be appreciated! I am just glad I dont do many trust

[IRonMaN]

On schedule D there is a spot to allocate the capital gains to the beneficiaries.

[quigs]

Unfortunately that didn't work. I have put all the capital gains in the box under line 19 on Sched D "Enter all capital gains attributable to income whether or not distributed"

I realize now that the tax due on 1041 line 28 is due to alternative minimum tax from schedule G, line 1c. And this amount, $37,332 comes from Schedule I Part III, line 54. 

I am now trying to work around why the program is still forcing the trust to pay AMT even  though all capital gains are being distributed. That does not seem right, but maybe it is?

If the trust is stuck paying the capital gains tax because of the AMT, then I certainly won't have the beneficiaries pay at their level too.

Any thoughts are appreciated!