When performing the error check for Colorado Estate/Trust Form 105, there is an error for Schedule B. The subtotal percent is 347%. It appears TurboTax Business is taking the full Tier 2 distributions and not just the federal distributable income.
On the Federal Distributions Section, I selected distribution amounts. The trusts accounting income this year is $4121. The trust does not require distributions, do I used Tier 2 for the distributions. The distributions exceeded the income.
Per 1041, Schedule B, the Income Distribution Deduction is: $3,551
The Federal Schedule K-1 Properly calculates the beneficiary percentage and the beneficiary's share of the current year income ($1,861 + $1,690 = $3,551):
When this information is transferred to the Colorado Form 105 (See above), it appears it is calculating the percent of distributable income by taking the total tier 2 distribution and dividing it by the Income Distributable Deduction (e.g. $6,455 / $3,551 = 181.7798%) instead of the beneficiary's share is the Distributable deduction (e.g. $6,455 / ($6,455 + $5,868) = 52.381725% * $3,551 = $1,860).
I would expect the Colorado Form would use either the calculated percentages or would use the value of distributable deduction from the Federal K-1's to calculate Form 105, Schedule B.
Is there an error with how TurboTax Business is transferring the federal distributions to the Colorado Form 105 or am I entering the distribution information incorrectly?
Thoughts?
