Generating K-1 for Complex Trust for Capital Gains Distribution

[gnoga]

I am using Turbotax Business.  I want to create a K-1 for a complex trust to distribute capital gains from an asset sale.  The trust is not distributing any income or any directly apportioned deductions.  I cannot generate the K-1 with just capital gains on it.

[M-MTax]

You need to allocate capital gains to income AND to the beneficiaries in the program. 

I believe there is a section in the program form that purpose.

[gnoga]

When I allocate the capital gains to income, the K-1 then includes the other income of the trust and the directly apportioned deductions.  How can the inclusion of those values be prevented?

[M-MTax]

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@gnoga wrote:

How can the inclusion of those values be prevented?

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What are you trying to exclude and why? Does the trust provide authorization for you to do so?

Distributions carry out DNI and it would be rare (as in virtually never done) to distribute capital gains only but not other income, such as interest or dividends. In fact, tax law doesn't even allow you to do so (i.e., pick and choose which type of income winds up on the K-1s and which type winds up on the 1041.

[gnoga]

The trust sold an asset (property).  The capital gain from the sale is being distributed but not any of the income or deductions.  The trust allows for this.

[M-MTax]

If you want that result you'll have to use forms view. 

Again, the trust may allow for distributions that are not necessarily in strict accordance with tax law. In other words, the trust may allow for distribution of certain types of income but tax law says that distributions carry out DNI; it doesn't allow trustees to pick and choose to get the best tax result.

[gnoga]

thanks