I absolutely mentioned that there were two classes of beneficiaries, several times in the thread. That has been what a lot of the posts between us have been talking about. Perhaps you are just spread too thin to remember. So, I think I better sum up the particulars in this single-hopefully-self-contained post: The trust owned only a condo. the condo was quickly sold for less than FMV at death, and the proceeds were parked in a no-interest bank account under the trust's name and were virtually all distributed to the beneficiaries sometime thereafter. The trust document, as I read it, does not talk about tax consequences of the trusts to the beneficiaries (nor would I expect it to), merely how distributions are to be divided. And that part seems clear: Up to 150k is to be first divided equally between 3 what I called "fixed beneficiaries" and any remainder is to be split equally between two other "variable beneficiaries". The only issue, now that all parties have gotten their distributions, is how they would share in the 1041 tax loss due to the condo selling for less than FMV. My original hypothesis was that the trust's tax loss would be shared ratably with the distributions. However, since 3 of the beneficiaries got fixed distributions, I thought you then told me that those three beneficiaries should not share. The estate attorney also believes such is the case but is not 100% sure. I equate that to meaning that the K-1s they would get would not show them having any tax consequences. If so, they could file their personal 2021 tax returns today, before getting their K-1s, comfortable that the K-1s would change nothing; wheres the variable beneficiaries will need to wait for their K-1s that will tell them exactly what their half of the tax loss amounts to.
I am sorry this thread has been so long and I imagine you are so very tired of my questions and, for that, I do apologize. I do think this is the only item I am aware of that is still undecided. Thanks much!
