Question

Capital gains in final year of family trust.

Forum|Forum|2 years ago
November 11, 2023
2 replies
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2023 is the final year of a family trust. There are large capital gains from stocks. How do I get the return to have the gains taxed by the beneficiary and not the trust?

A

Anonymous_

Employee

Are you using TurboTax Business to prepare the 1041 for the trust?

When the final return is prepared, the gain can be passed through to the beneficiaries on the K-1s that are issued to them.

C

changelaterAuthor

Yes I’m using the business version for trusts. It defaults to taxing the trust taxes on the capital gains.

thanks.

A

Anonymous_

Employee

@changelater wrote:

Yes I’m using the business version for trusts. It defaults to taxing the trust taxes on the capital gains.

Correct, but ensure that you indicated this is the final year for the trust in the program.

Even still, you may have to assign the gains to income and then to the beneficiaries, and then make a distribution. The program is quirky in that respect.

M

Mike9241

you can indicate when you get to the distribution section that all income including capital gains is being distributed. based on the trust instrument certain income may have to be distributed schedule B line 9 of 1041 If capital gains are not required to be distributed they become other distributions reported on schedule B line 10 of 1041