So, these fixed beneficiaries should still be sent K-1s but they will have all zeroes on therm in terms of any tax impacts. Is that correct? If so, those beneficiaries can probably file their personal tax returns now, knowing that the K-1s they get will have no impact, right?
To be clear, you are saying that such wording means that they do not share in any taxable gain or loss, right?
A yes answer makes me want to pose a hypothetical: Suppose that the sales proceeds had not been enough to reach this maximum but there were income, say due to bank interest after the sales proceeds were deposited in a trust bank account but before anything was distributed to beneficiaries, and, with that interest, there was more than enough. Does that mean they would then have some tax exposure in that case, i.e., on the part of their 50k that was due to interest? Or would the trust be responsible for paying all the taxes on that bank interest?
Thanks!
