Everything working good now since the entity type was noted as a Simple Trust. I just noticed this from the intuit web site:
Simple Trusts
A simple trust is a trust that is required to distribute all of its income during the tax year in which it was received by the trust. In addition, only distributions of income are allowed to beneficiaries. Income, in this case, is defined under both local law and the governing instrument, the trust document. Historically, income has not included capital gains income; under most trust instruments and State laws, capital gains have been considered corpus. A trust will lose this classification if it distributes corpus in any tax year; thus, a trust cannot be a simple trust in its year of termination or any year of partial liquidation. Income of the trust is taxable to the recipient even if distributions are not made, although a simple trust itself can incur tax liability (i.e., realized long-term capital gains). In addition, the structure of a simple trust does not provide for charitable contributions.
That being said I just wanted to make sure that I have used the right entity type as a Simple Trust. My mom had a Revocable Trust stating that the assets were to be distributed to her two beneficiary children. On her Investment account it received a step up basis and the funds were transferred to her two children. After death the trust became irrevocable and there was a taxable annuity payment that was paid to the new EIN number. There also have been the expenses previously noted and the net income will be distributed on the K1’s all on the initial and final 1041. Just wanted to be clear on the specifics to make sure the entity type is simple trust and not a complex trust or estate. That is all of the details.
