My mother died on May 14, 2022, and her living Trust became irrevocable. I thought this would be straightforward, but I am unsure how to proceed. I am using the TurboTax Business desktop application.
For the section "Do You Need to Take Care of a Trust or Estate?", I don't know which option to choose, as they both seem to apply. It is a trust, but my mother passed away.
Option 1 - A trust. This will say "trust" in the title of the document.
Option 2 - An estate. This is for someone who passed away. There may be a will.
I ran through the process using both options, and only option 2 allows me to specify my mother's date of death, so maybe that is the right option?
However, I am wondering if I even need to file taxes for this for 2022. In September I liquidated all mutual funds associated with the Trust and transferred the proceeds to the Trust bank account, then distributed most of it to the Trust beneficiaries. The liquidation resulted in a net loss of $3,400 (per the 1099-B forms received). Since I don't have a gain of $600 or more, should I not have to file?
But, if I don't file, how do I generate the K1 forms for the beneficiaries to realize their portion of the loss? Or, do I wait and file a single final tax return once the Trust is fully distributed and closed out?
Sorry for the long-windedness.
