Level 3

Complex Trust question

Forum|Forum|2 months ago
April 5, 2026
2 replies
0 views

I am working on a complex trust with two beneficiaries. On the form 1041 schedule B line 9, the income required to be distributed currently (and the amount the beneficiaries actually received) is $6588. This is greater than the the line 7 distributable net income of $2386. The income distribution deduction is the lessor of the two, and this is what flows through to the K-1s. My question is, shouldn't the actual amount that was distributed be reflected on the K-1s? Did I miss something?

BobKamman

Level 15

Were capital gains included in the distribution, but Schedule D shows them assigned to the trust?

T

terrynAuthor

Level 3

There were minimal capital gains and interest that the account in the trust earned. $2 interest, $5 dividends and $65 capital gains. The only other income to the trust was the state of CT refund of $3129. Only expense was $750 accounting fee. Would you count the state refund as income? There was no deduction for state income tax the year before...

sjrcpa

Level 15

What year was the CT refund for? Was there a state tax deduction on the 1041 for that year?

The more I know the more I don’t know.

sjrcpa

Level 15

What kind of deductions are there? Do they reduce taxable income but not Accounting income? Such as state tax paid on corpus?

The more I know the more I don’t know.

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