The Income section has a something under it titled 'Home Sales' which has the correct capital gains amount for the sale of the rental.
Just under that is "Allocation of Capital Gains". It is showing the capital gains amount times 2, plus the amount for section 1250 recapture tax. In other words, it wants me to allocate about twice the actual capital gains amount that was actually generated this year. I do not know where this is coming from!
However, when I stepped back through that section and allocated the whole amount being displayed to the Beneficiaries, Schedule D drops the allocation to the Trust. And, as expected the capital gains K-1s for the Beneficiaries double!
In other words, now each of the beneficiaries are paying twice what they should, and with even larger tax ramifications in the for at least one family because it will increase their future Medicare payments my increasing their IIRMA tax. Forgive me for sounding like I am complaining. I do appreciate the help! But this is still not a good situation right now.
In summary, the result is one big positive step forward, but one big negative step backwards. However, maybe a hair closer to solving this!
