I am still lost here on the State Tax piece of the filing. For the Federal return I now understand how the trust income from the liquidation of the trust moves from a Schedule K-1 on Form 1041 to the beneficiaries 1040.
Based on the previous answer it seemed like a full distribution of the trust might not generate a PA Schedule DD. I am unclear why this would be, since the total liquidation would include the income. QUESTION 1 is whether a Schedule DD should be filed out when a trust is liquidated.
Based on the answer to QUESTION 1, I would like to understand how the income from the liquidation of the trust flows through to the Pennsylvania Individual Tax Forms. Line 6 of PA Schedule RK-1 is the only line on that form that is filed in. If Schedule DD is not completed that line would be zero. QUESTION 2 is how to report the income from the liquidation of the trust on the PA-40, and what forms or schedules on the PA-41 are the sources.
Detailed help would be much appreciated.
