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Why won't the business program recognize that my simple trust requires all current income to be distributed

Why does turbotax change my trust from simple to complex?
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4 Replies
M-MTax
Level 15

Why won't the business program recognize that my simple trust requires all current income to be distributed


@user17600343099 wrote:
Why does turbotax change my trust from simple to complex?

Are you trying to distribute more than the trust's DNI?

Why won't the business program recognize that my simple trust requires all current income to be distributed

are you sure you have a simple trust rather than a grantor or complex trust? Simple trusts become complex trusts in the year of dissolution.  Also, distributing capital gains except for grantor trusts may require special entries if it's even allowed. 

M-MTax
Level 15

Why won't the business program recognize that my simple trust requires all current income to be distributed

Plus, in TurboTax Business, if you distribute corpus in addition to income the program will automatically switch the trust to a complex trust.

Why won't the business program recognize that my simple trust requires all current income to be distributed

In response to Mike9241 and M-MTax: Thank you for your observations about DNI of simple trusts.  And yes, distrbuting principle would, by definition, change the trust designation.  Turbotax apportioned DNI between the trust and the beneficiary in spite of the my declaration of "simple".   The trust documents for my granddaughters  require 100% distribution of DNI in the current year.  Solution?:  Use the override button for the figures contained in Schedule B.   Tip of the hat to Dava in Tx and Nancy in Fl.    To quote Dava:  "When you open a form, keep scrolling until you get to the bottom!"   Thanks to everyone!

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