This is my 7th year using TT for Business to file taxes for an irrevocable Trust. This year I am closing the trust and distributing income and what is left of the original principal to all the remaining beneficiaries. However, I am stuck on a big problem.
Schedule D (Form 1041) Part III is combing Columns 1 and 2 to produce a Net long-term gain in Column 3 on line 19. And that gain is more than twice the value of the actual Capital Gains from the sale of a rental property that was sold this year!
As the result, TT4B is creating a payment voucher for the Trust to be paid to the IRS. And, TT4B is also creating a K-1 for each Beneficiary that seems to be the correct DNI for each.
Bottom line. Why the double taxation? What am I missing?
