I'm trustee of a complex trust and can allocate capital gains to the beneficiaries. I distributed $3,000 of $5,000 of the cg. What do I enter as distributions and alloc?

Forum|Forum|3 years ago
February 9, 2023
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If I enter $5,000 as allocable and $3,000 as attributable to income, Schedule D, line 18(a) allocates the entire $5,000 to the beneficiary and $0 to the trust, but the K-1 correctly shows $3,000 cap gain distributed. If I enter $3,000 allocable and $5,000 attributable, Sched D line 18(a) correctly allocates $3,000 to beneficiary, but the K-1 shows less than $3,000. I can't find any combination of the two numbers that allocates $3,000 to the beneficiary in both the Schedule D and the K-1. What should I enter?

TurboTax Online

Anonymous_

Employee

I cannot seem to replicate your issue.

I entered $5,000 as LTCG with $3,000 allocated to income and to the beneficiary, then made a distribution of $3,000 to the beneficiary. Note that I also used percentages and that also appeared to be correct.

I have $3,000 allocated to the beneficiary and $2,000 allocated to the trust on Schedule D (18a).

taxbattlerAuthor

Thanks for your quick response. Do I understand that on the Income tab under the headng Allocation of Capital Gains/Loss, in the subsequent page Allocation of Long Term Capital Gain you entered $3,000 and the next page Enter Gains Attibutable to Income you also entered $3,000? When I do that, the Schedule D is correct as you note in your test, but the K-1 has a lesser amount distributed to the beneficiary. Did you check the K-1? thanks again.