Solved: How can you distribute all trust income prior to year-end if you don't have all income information until after Jan. 1?
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How can you distribute all trust income prior to year-end if you don't have all income information until after Jan. 1?

Is undistributed trust income taxed?  Can you distribute trust income in January without being taxed?

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How can you distribute all trust income prior to year-end if you don't have all income information until after Jan. 1?

"Can you distribute trust income in January without [the trust] being taxed?"

 

Yes, provided the fiduciary of the trust makes a Section 663(b) election on the trust's Form 1041. In that event, any amount paid or credited to a beneficiary within 65 days (in this instance on or before March 5, 2016) following the close of the tax year will be treated as having been paid or credited to that beneficiary on the last day of the tax year (December 31, 2015).

 

Follow the screenshots below in order to make a Section 663(b) election in TurboTax Business.

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New Member

How can you distribute all trust income prior to year-end if you don't have all income information until after Jan. 1?

The trust is getting income from an LLC which won't be final until after Jan. 1.
Highlighted
Level 15

How can you distribute all trust income prior to year-end if you don't have all income information until after Jan. 1?

"Can you distribute trust income in January without [the trust] being taxed?"

 

Yes, provided the fiduciary of the trust makes a Section 663(b) election on the trust's Form 1041. In that event, any amount paid or credited to a beneficiary within 65 days (in this instance on or before March 5, 2016) following the close of the tax year will be treated as having been paid or credited to that beneficiary on the last day of the tax year (December 31, 2015).

 

Follow the screenshots below in order to make a Section 663(b) election in TurboTax Business.

View solution in original post

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