I've got a new trust and want to set the practice of distributing capital gains to the beneficary from year one.
I have $10,000 of dividend income and $10,000 of capital gains in year 2 (2021) The trust has a capital loss carry forward from year one of $40,000 due to inherited assets declined in value before being sold in year one.
In the step-by-step, --INCOME/INVESTMENT INCOME/ALLOCATION OF CAPITAL GAINS -- I input that $10,000 of short term gains are distributed to beneficiary and the same on the next screen (If I leave the next screen with a $0, & hit continue, it returns to the "Your Income" screen showing $0 of allocation of CG. ??????)
With that the "Dist Inv - K-1" form under Part II, Line 14 Amount distributed to Beneficiary $5,000 of NQ dividends & $5,000 of capital gains. This is also what the K-1 is showing. Should be $10,000 & $10,000.
Also strangely, even though the $10,000 of capital gains is being distributed to the beneficiary and will be reported on his personal return, TT is reducing the $40,000 CG loss carryover inside the trust by $10,000, even though the CG is being passed through to the beneficiary. It should remain unchanged since the CG is being passed through. ??????????????????
