Yes I understand your issues regarding what I can or should do regarding electing to make a capital gains distribution, but the questions I'm trying to resolve is why is TT producing the strange results on the "Distributable Income for Schedule(s) K-1" of only showing half of the "Dividends" and half of the "Total Capital Gains".
You infer that if a capital loss carryover exist, then your forced to use it up at the trust level before you should distribute CG's out, otherwise you waste the capital loss carryover at the trust level because the beneficiary also must report the CG on their personal return, in effect wasting the capital loss carryover. Its your opinion that this is a correct per IRS regs?
So then the thing to do is for the trustee to elect to make a distribution of corpus equal to the capital gains each year (until the capital loss carryover is used up) to accomplish the objective of distributing all earnings and gains.
So when I go back in TT and delete the capital loss carryover, but still distributing the $10,000 of dividends and $10,000 of CG's, (via the "Allocation of Capital Gains" in the step-by-step), the K-1 is only showing $5,000 and $5,000.
However if I then go to distributions in the S-B-S and put $10,000 into the second tier box, the K-1 is then finally correct.
Whether that is by design or not, its a terrible programing design when there is no "flag" or warning that the second tier box must contain the same value as what you put into the "Allocation of Capital Gains" in the S-B-S. Thats what it appears anyway. Your thoughts?
