I'm trustee of a complex trust and can allocate capital gains to the beneficiaries. I distributed $3,000 of $5,000 of the cg. What do I enter as distributions and alloc?

[taxbattler]

If I enter $5,000 as allocable and $3,000 as attributable to income, Schedule D, line 18(a) allocates the entire $5,000 to the beneficiary and $0 to the trust, but the K-1 correctly shows $3,000 cap gain distributed.  If I enter $3,000 allocable and $5,000 attributable, Sched D line 18(a) correctly allocates $3,000 to beneficiary, but the K-1 shows less than $3,000.  I can't find any combination of the two numbers that allocates $3,000 to the beneficiary in both the Schedule D and the K-1.  What should I enter?

[tagteam]

I cannot seem to replicate your issue.

I entered $5,000 as LTCG with $3,000 allocated to income and to the beneficiary, then made a distribution of $3,000 to the beneficiary. Note that I also used percentages and that also appeared to be correct.

I have $3,000 allocated to the beneficiary and $2,000 allocated to the trust on Schedule D (18a).

[taxbattler]

Thanks for your quick response.  Do I understand that on the Income tab under the headng Allocation of Capital Gains/Loss, in the subsequent page Allocation of Long Term Capital Gain you entered $3,000 and the next page Enter Gains Attibutable to Income you also entered $3,000?  When I do that, the Schedule D is correct as you note in your test, but the K-1 has a lesser amount distributed to the beneficiary.  Did you check the K-1?  thanks again.

[tagteam]

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@taxbattler wrote:

Did you check the K-1? 

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Yes, I did check the K-1. In fact, I also did a test return with two K-1s and both were split evenly (50% each).

In both cases, the figures on the K-1s were correct; $3,000 for the first K-1 and then $1,500 each for the second set of test K-1s.

I am not sure what is happening in your case.

[taxbattler]

Thank you for trying this.  I must have done something earlier in the return that is impacting my results.  I'll redo my return.