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tagteam
Level 15

How can you distribute all trust income prior to year-end if you don't have all income information until after Jan. 1?

Can you distribute trust income in January without being taxed?

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tagteam
Level 15

How can you distribute all trust income prior to year-end if you don't have all income information until after Jan. 1?

Yes, provided the fiduciary of the trust makes a Section 663(b) election on the trust's Form 1041.

 

In that event, any amount paid or credited to a beneficiary within 65 days following the close of the tax year will be treated as having been paid or credited to that beneficiary on the last day of the tax year.

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1 Reply
tagteam
Level 15

How can you distribute all trust income prior to year-end if you don't have all income information until after Jan. 1?

Yes, provided the fiduciary of the trust makes a Section 663(b) election on the trust's Form 1041.

 

In that event, any amount paid or credited to a beneficiary within 65 days following the close of the tax year will be treated as having been paid or credited to that beneficiary on the last day of the tax year.

View solution in original post

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