Question

Trust Tax Return - Allocation of Capital Gains

Forum|Forum|1 year ago
April 1, 2025
1 reply
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Hello, I am working on preparing a Trust Tax return for my deceased Mother In Law. There is one Beneficiary of this trust, her granddaughter who is under 18. The granddaughter is subject to a RMD each year. The RMD Distribution was $1,100 for 2024. This year turbo tax is asking me about the allocation of Long Term Capital Gains> The full question is Enter the portion of your long-term capital gain of $47,223 that is allocable to the beneficiaries? Do I report the amount that was paid to the Beneficiary $1100? Or do I report the $47,223 since all of this money is for the beneficiary?

TurboTax Business Windows

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DavidD66

You do not enter $47,223. Is the trust a simple trust, or a complex trust. Since you mention a required distribution I am guessing that it is a simple trust. This means that it is required to distribute all income, and prohibited from distributing principal including capital gains (in most cases). If you didn't, and aren't planning to distribute any of the capital gains to the beneficiary you do not allocate any portion to the beneficiary.

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