Last year the Trustee of my mother’s estate provided a K1 that reported 0 taxable income or directly apportioned deductions. Although he claimed that $60,000 in in-kind donations were made to various nonprofits, he did not report any charitable deductions on the Trust’s 2023 tax return. I have been asking about this, and now he claims he decided it was more appropriate for the beneficiaries to take the deductions. Except 1) he failed to communicate that to me until just now, and 2) I thought Trusts could not pass through charitable contributions. Suggestions?
There are some situations where a trust may take a charitable deduction. If this is a grantor trust, the grantor would take the charitable deduction. There are many types of trusts and it is best to review the trust documents to establish the type of trust it is and how the income and deduction items should be reported.
Most states have adopted a version of the Uniform Trust Code (UTC), which explicitly gives beneficiaries the right to a copy of the trust document. You can usually request the document in writing. You should be able to find if your state complies on the state's legislative website.
Hope this helps!
Cindy