We have a complex trust where we took a tier2 partial annuity withdrawal to the trust. The funds were then distributed to the beneficiary. I have input the income on Box 8 as Ordinary income from 1099-R Box 2a, State taxes on line 11a, and Federal taxes on Schedule G Part II line14 with the box checked off. The state taxes are deducted from income correctly, but I am missing something as it indicates a refund of Federal taxes to the Trust and doesn't pass this on to the beneficiary. (Shows Distributable net income with no federal taxes deducted), which then creates an incorrect K1 for the beneficiary showing it received a bigger distribution than the actual. How do I correct this? Thanks.
