THANK YOU SO MUCH! So, you are saying that Nolo was right, that K-1s are needed for any distribution over $600, even if it ends up equating to no income; that, indeed, that is what the K-1 is intended to do, i.e. to resolve if the distributions were partially income or loss? Do I also need to do a 1041, whatever that is that I keep reading about?
Are you saying that the loss amount is unlimited, but that you can only take 3,000 of it per year and carry the rest forward? I assume that is 3,000 per beneficiary per year, right?
If there are 5 beneficiaries, is the loss shared proportionally according to how much each got as a distribution? Or can it be assigned, if all agree, to the folks with the highest potential to be able to use it? Some of the beneficiaries are in a very low tax bracket, maybe even a zero tax bracket.
Please verify that this does not change your answer, which is my suspicion: The home did not sell for $50,000. To be clear, it sold for about 630k and, after sales commissions and other charges, the trust got 602K. The broker valuation was 665k. So, is the initial loss 665 - 602 = 63, or is it 665 - 630 = 35? I would be surprised if the 665k estimate was net of any sales commissions, so should it be reduced before computing that initial loss? Then, I can also add the estate expenses, is that correct? Someone said I can choose to assign ALL of the estate's expenses to the trust (presumably because the estate would have no other place to deduct such other non-home-sale-related expenses), even though some of it was not for the asset in the trust. Is that correct?
Having your help is a godsend. I used to be able to get great advice over the phone with TurboTax from EAs and CPAs mostly, but, this year, I cannot seem to get any of my issues escalated to that level and have little confidence in the answers after they spend an hour searching their database and mention any host of things along the way that I know to be irrelevant. Do you have any suggestion of how to have a phone conversation with someone like that at TurboTax if i feel I need that kind of help too?
