@Steelydan989 wrote:
We're paying out all taxable income to the beneficiary.
The above-quoted statement is yet another (unaddressed) issue that has been left behind (somehow).
The quote is from the original post on March 9th. Assuming the trust is a calendar year taxpayer (which virtually all are), then March 9th would be too late to make a distribution to a beneficiary, for the 2021 tax year, without the trust having to pay all of the tax on the taxable income the trust received in 2021.
March 9th would be past the date allowed for the trust to make a Section 663(b) election (to have the distribution treated as if it were made in the 2021 tax year) so this entire discussion has been rendered moot, at least for the 2021 filing period.
