Federal - Form 1041 for a trust. 2020 income comprised of interest, dividends and OID discount totaling approx. $21k. In 2020, paid 2019 MD state tax liability of $88k (we sold off most of the investment portfolio and paid capital gains) so had negative federal income for 2020 and will get a full refund of our $17k estimated federal payments (will apply to next year etc.).
MD state - Form 504 for a trust. This is the problem. The MD 504 shows in LIne 1 the -$67k of correct federal income. Line 4 shows the same plus a $100 exemption. Line 5 takes the two negative figures and sums them to a positive $135k of income, and line 6 adds the $135k and - $67k and incorrectly creates $69k of positive income, with tax liability of $3200 flowing from that. Line 5 and 6 have to be wrong.... The 2020 income was still really only $21k from the investment income.
Thanks very much for your help. I filed an extension for both federal and MD last week based on the assumption I paid all 2020 taxes and was in a refund status for both.
