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Discussion Forum Index --> Basic Tax Questions --> 1041 where trust pays the tax
Discussion Forum Index --> Tax Questions --> 1041 where trust pays the tax
LSC CPA (talk|edits) said:
| 29 January 2008
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| What is a situation in which a Form 1041 is filed and the trust pays the tax? Distributions were made to beneficiaries during the year. Would this be as a result of how the trust was set up? We have no copy of the trust document but I was told to have the trust pay the tax and not issue K-1's to any of the beneficiaries of the trust. This was a grantor trust where the grantor died in 2006.
Thanks.
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Dennis (talk|edits) said:
| 29 January 2008
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| Personally I will not prepare a 1041 without reviewing the document. Can it happen? One possibility is that the distributions were specific bequests.
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LSC CPA (talk|edits) said:
| 29 January 2008
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| If the trust makes distributions, even if just from the corpus of the trust, is it then required to issue K-1's and have the income flow through to the beneficiaries?
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Dennis (talk|edits) said:
| 29 January 2008
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| Depends. A specific bequest carries only the income associated with that bequest. Separate shares are kind of treated as individual trusts filing a consolidated return. You should at least talk with the attorney.
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