Solved: Should I show the distribution of \$6000 in 2016 tax return if we already paid taxes on it in 2015?

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Level 1

Should I show the distribution of \$6000 in 2016 tax return if we already paid taxes on it in 2015?

In 2015 Grantor trust (6 grantors) received distribution \$7000 and Schedule K-1 from another complex trust where the 6 grantor's are beneficiaries. The Grantor trust filed 2015 tax return showed the distribution of \$7000 in Grantors letters (\$1,166 to each grantor).But the actual distribution was made in 2016 and only \$1000 to each grantor.
Should we show the distribution of \$6000 in 2016 tax return if we already paid taxes on it in 2015 ?

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Level 15

Should I show the distribution of \$6000 in 2016 tax return if we already paid taxes on it in 2015?

" Should we show the distribution of \$6000 in 2016 tax return if we already paid taxes on it in 2015 ?"

No, since the \$6,000 of taxable income was apparently "earned" in 2015 and is taxable to the grantors (i.e., owners of the trust who are entitled to that income) in that year. It is irrelevant that the funds were not withdrawn until the following year.

3 Replies
Level 15

Should I show the distribution of \$6000 in 2016 tax return if we already paid taxes on it in 2015?

" Should we show the distribution of \$6000 in 2016 tax return if we already paid taxes on it in 2015 ?"

No, since the \$6,000 of taxable income was apparently "earned" in 2015 and is taxable to the grantors (i.e., owners of the trust who are entitled to that income) in that year. It is irrelevant that the funds were not withdrawn until the following year.

Level 1

Should I show the distribution of \$6000 in 2016 tax return if we already paid taxes on it in 2015?

Thanks a lot! I thought so.. but wanted to be sure. Thx!!
Level 15

Should I show the distribution of \$6000 in 2016 tax return if we already paid taxes on it in 2015?

You are quite welcome.
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