Discussion:Schedule J - 1041 Trust
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| {{ForumReplyPost|UserID=Taxestaxes|Date=26 February 2009|Text=WOW, this is someone who trained me, and its wrong? Would there be a situation when it wasnt supposed to be treated as charitable deduciton. In looking back at prior returns for this trust, they have always issued a K1 to the church, and paid taxes each year on the interest income the trust made......if those were wrong, there are several amended returns I need to do for them......}} | {{ForumReplyPost|UserID=Taxestaxes|Date=26 February 2009|Text=WOW, this is someone who trained me, and its wrong? Would there be a situation when it wasnt supposed to be treated as charitable deduciton. In looking back at prior returns for this trust, they have always issued a K1 to the church, and paid taxes each year on the interest income the trust made......if those were wrong, there are several amended returns I need to do for them......}} | ||
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| + | {{ForumReplyPost|UserID=Taxestaxes|Date=26 February 2009|Text=Hoping someone can clarify some things for me. I have done numerous searches on this website and found conflicting statements. There was even one post that said yes even qualified charities still get K1, but thats beside the point for me. I am just trying to figure out if this trust should get the deduction or not.....The trust was set up so that the person that passed away, put this money aside and the income each year from the CD goes to the church, less commission to fiduciary. Thats all this trust does....they have no other expenses nor does anyone else get any money. So, the trust had $450 interest income and 6% went as commission and balance went to church. In past, they had made more interest and one year, they owed $100 in tax, because the return was completed as if the money paid to the church was an income dist. deduction, not as a charitable deduction. So if this was wrong, I want to amend for them. Can anyone please clarify? Thanks. | ||
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Revision as of 19:49, 26 February 2009
Discussion Forum Index --> Advanced Tax Questions --> Schedule J - 1041 Trust
Discussion Forum Index --> Tax Questions --> Schedule J - 1041 Trust
Taxestaxes (talk|edits) said: | 25 February 2009 |
| I am preparing a 1041 for a very small trust....problem is the amount of income for year is not as much as what was distributed.....I know schedule J is for that situation, but this trust has not filed but prior year....in other years, it had no income to file on......so in trying to muddle thru schedule J, I got confused.....anyway, can someone clarify that Schedule J is even required? IS there something I am missing. Instructions say
Use Schedule J (Form 1041) to report an accumulation distribution for a domestic complex trust that was: Previously treated at any time as a foreign trust (which doesnt apply here) and Created before March 1, 1984, which again doesnt apply...... So maybe I dont need J? The amount on the K1 goes to a church,and they dont even file anyway. | |
Walking Spanish (talk|edits) said: | 25 February 2009 |
| An income distribution to a qualified charity is only deductible as a charitable deduction. It is never a distribution deduction and a charity never receives a K-1. Compute the deduction on Form 1041, Schedule A and enter the amount on Form 1041, line 13. No K-1 necessary. | |
| 25 February 2009 | |
| (sorry, I didn't see that it went to a church until now) | |
Taxestaxes (talk|edits) said: | 26 February 2009 |
| Well, the preparer I took this over from had a reason that it was not considered charitable deduction.....dont rememeber exact details, will look up later......thanks. | |
Taxestaxes (talk|edits) said: | 26 February 2009 |
| ok, so prior preparer stated that the trust was set up for the benefit of the church, and that it was not considered charitable deduction because it was required to be given to church, so it was income distr. They are the only ones the trust gives money too.....I guess at that time it made since, and I took his word....but now re-reading back thru the instructions I see the light! | |
Taxestaxes (talk|edits) said: | 26 February 2009 |
| WOW, this is someone who trained me, and its wrong? Would there be a situation when it wasnt supposed to be treated as charitable deduciton. In looking back at prior returns for this trust, they have always issued a K1 to the church, and paid taxes each year on the interest income the trust made......if those were wrong, there are several amended returns I need to do for them...... | |
Taxestaxes (talk|edits) said: | 26 February 2009 |
| Hoping someone can clarify some things for me. I have done numerous searches on this website and found conflicting statements. There was even one post that said yes even qualified charities still get K1, but thats beside the point for me. I am just trying to figure out if this trust should get the deduction or not.....The trust was set up so that the person that passed away, put this money aside and the income each year from the CD goes to the church, less commission to fiduciary. Thats all this trust does....they have no other expenses nor does anyone else get any money. So, the trust had $450 interest income and 6% went as commission and balance went to church. In past, they had made more interest and one year, they owed $100 in tax, because the return was completed as if the money paid to the church was an income dist. deduction, not as a charitable deduction. So if this was wrong, I want to amend for them. Can anyone please clarify? Thanks. | |
