How to allocate trust capital gain on a trustee return (form 1041) in a year that there are distributions to beneficiaries.

[Anonymous_ · Accepted solution]

In addition, look at the section of your K-1 depicted in the screenshot below. You should see figures in Lines 3 and 4a.

[relyonendyind416]

You are right.  I have to restart Turbo tax.  Now K1 is right and very little tax ($17) under trust.  Now sure how the $17 occurs, but it is good enough.  Thank you so much!

[relyonendyind416]

yes I do see numbers on 3 and 4 on the K1.  How may I let Turbo tax know how great you are? thx

[Anonymous_]

Glad it worked out for you. No problem and you are most welcome.

[relyonendyind416]

Hi, may I trouble you for another question?

May you share where to enter K1 information issued to a disregarded LLC information in 1041?  The LLC is wholly owned by the trust.  Thx

[Looney3]

How to I allocate all cap gain to the beneficiary on a Complex Trust?

[DavidD66]

First you have to determine if state law and the governing instrument of the trust allows for the distribution of capital gains from a complex trust.  If it is allowed, you would allocate the capital gains to fiduciary accounting income (FAI) which will make them available for distributable net income (DNI).