It is specified as the final return. That was done in the introduction section, and it is reflected on the 1041 Form on checkbox under line F.
And, the Capital Gains are reflected appropriately on the K-1s being produced.
As for leaving anything in the trust, I haven't. Rental income did not cover costs this year. Interest income is also relatively very small. Taxes were paid every year on the income, so the only thing that remains an asset is part of the original principal the Grantor provided when the Trust was funded years ago.
So, the Capital Gains on the K-1s reflect all the assets being distributed to close out the Trust. So, why is TT4B saying a tax bill equivalent to what is being distributed to the beneficiaries must also be paid by the trust? Why the double taxation? What haven't I entered? And where?
Do I need to enter what is left of the principal somewhere? It doesn’t cover the unexpected tax bill!
