Generally the beneficiaries of a trust do not pay tax on distributions from the trust's corpus, or principal. Distributions from the trust's income are taxable to the beneficiaries in the year received.
You should have received a Schedule K-1 from the trustee. This document will break out the corpus and income distributions. To enter the K-1 in TurboTax, please follow these steps:
- Open your return in TurboTax. (To do this, sign in to TurboTax and then select the Take me to my return button.)
- In your TurboTax program, search for K-1 and select the "Jump to" link in the search results.
- This will take you to the Schedules K-1 or Q screen.
- Answer Yes and follow the prompts. You may be prompted to upgrade to Premier, if you are using the Federal Free version of TurboTax.
- We’ll ask some questions about your K-1, and then you’ll enter the data from the form into TurboTax.
