Got it, sorry about the hypothetical. Back to the real world. Your other answers seem like you may be walking back your prior answer, which I doubt is true, so I need to clarify: I am referring to the 3 folks that got 50k each as "fixed beneficiaries" and the 2 folks that split what is remaining from the trust proceeds, as "variable beneficiaries". I am assuming, PERHAPS WRONGLY, that the purpose of the K-1s is to tell each of the 5 (as well as the IRS) what tax responsibility each has. If that is correct, from what you've said, I would think that means that the K-1s for the fixed beneficiaries should show them having no taxable gain or loss, whereas the K-1s for the variable beneficiaries would each show the same tax loss, which would be half of the loss shown on the Form 1041. Is that correct? It would be nice to be able to tell the fixed beneficiaries that they don't have to continue to wait for K-1s and that can file their tax returns today rather than waiting for K-1s to arrive in a week.
