OK, thanks! You are correct that the Trust is below the $12.92 Million Form 706 threshold, way below, like $11.5 Million below. LOL.
So it looks like fees such as the Estate Lawyer, Accountant and recording the Death Certificate would be deducted on lines 12 and 14 on the 1041. I have a question and I will use this simple example so that it will be easy for me to understand. Let’s say that in 2024 the Trust took a $10,000 distribution from the inherited IRA and issued a check to a Beneficiary for $10,000 in November 2024. The Lawyer, Accountant, and Fiduciary fees totaled $2,000. Then in January 2025 the Trust received a 1099-R for the $10,000 Inherited IRA distribution. When the K-1 is generated by H&R Block Tax software Line 5 “Other Portfolio and Nonbusiness Income” shows $8,000. So wasn’t $2,000 of the $10,000 given to the Beneficiary in November 2024 considered Corpus (Principal)? If this is true, it would be a Complex Trust.
By the way, thank you for answering my many questions so quickly. You are very knowledgeable! You must be a Tax Lawyer, CPA or both 😀
