topic Re: Trust depreciation recapture in Get your taxes done using TurboTax

Trust depreciation recapture

Farmgirl123 — Mon, 02 Dec 2024 23:25:43 GMT

Who pays the depreciation recapture? The trust or the beneficiary?
is it dependent on who got the depreciation deduction?

Re: Trust depreciation recapture

M-MTax — Mon, 02 Dec 2024 23:32:45 GMT

is it dependent on who got the depreciation deduction?

Yeah but who sold the property? Depreciation follows income.

Re: Trust depreciation recapture

Farmgirl123 — Mon, 02 Dec 2024 23:46:50 GMT

The trust sold the property but gave the recapture to the beneficiaries

Re: Trust depreciation recapture

Farmgirl123 — Tue, 03 Dec 2024 14:57:51 GMT

Trust kept all the depreciation.
recapture was distributed to beneficiaries.

Re: Trust depreciation recapture

M-MTax — Tue, 03 Dec 2024 18:11:27 GMT

What about the actual sales proceeds?

Re: Trust depreciation recapture

Farmgirl123 — Tue, 03 Dec 2024 18:19:56 GMT

Distributed to the beneficiaries as principal.

Re: Trust depreciation recapture

M-MTax — Tue, 03 Dec 2024 19:02:12 GMT

Then there should be K-1s and reporting is an issue for the beneficiaries on their returns.

Re: Trust depreciation recapture

Farmgirl123 — Tue, 03 Dec 2024 19:43:57 GMT

It was distributed to the beneficiaries and was on our k-1.
we had received none of the depreciation over the years.
We should or should not have received the recapture or should the recapture been kept with the trust?

Thank you.

Re: Trust depreciation recapture

M-MTax — Tue, 03 Dec 2024 21:33:09 GMT

If you received income you should have received the depreciation. Not sure how the trustee handled this situation.

Re: Trust depreciation recapture

Farmgirl123 — Tue, 03 Dec 2024 23:00:38 GMT

Thank you!

Re: Trust depreciation recapture

M-MTax — Wed, 04 Dec 2024 00:23:23 GMT

You are welcome!

Re: Trust depreciation recapture

Farmgirl123 — Wed, 04 Dec 2024 00:30:35 GMT

So I am just curious. If you have a simple trust with rental property would it be highly unlikely that the trust should have any passive losses because of depreciation and amortization?

Re: Trust depreciation recapture

M-MTax — Wed, 04 Dec 2024 03:10:59 GMT

Depreciation makes it more likely that there will be a passive loss. Not sure what you're getting at here.

Re: Trust depreciation recapture

Farmgirl123 — Wed, 04 Dec 2024 08:51:52 GMT

I’m just saying that if the trust keeps all the depreciation and amortization with the trust and doesn’t distribute it to 6 beneficiaries of a simple trust that it will be more likely that there are passive losses for the trust then if they had distributed it with the income for a simple trust.
In other words the trust kept the deductions in order to have losses? I’m not saying that is right but I’m saying this is what would happen if you had a lot of depreciation and amortization that you didn’t distribute Ute like you were suppose to?

Re: Trust depreciation recapture

M-MTax — Wed, 04 Dec 2024 15:28:05 GMT

You need to run this by a tax pro who can examine the trust docs and past returns.

Re: Trust depreciation recapture

Farmgirl123 — Thu, 05 Dec 2024 10:05:44 GMT

Thank you!

Farming and fishing income

Farmgirl123 — Sat, 15 Feb 2025 12:21:49 GMT

If a trust has farming and fishing income on the k-1 it would be in both box 6 and 14? That would come from line 42 of 1040 E? And that would in turn come from schedule F or form 4835? That would be for crop share and not cash rental?
Thank you!

Re: Farming and fishing income

M-MTax — Sat, 15 Feb 2025 14:17:04 GMT

Is the trust operating a farm? If it only receives cash rental from a farm it owns, it reports on Schedule E.

Re: Farming and fishing income

Farmgirl123 — Sat, 15 Feb 2025 17:59:47 GMT

It shows on the k-1 Line 14 farming and fishing income noted to be F. Wouldn’t that be operating a farm? Would the same number ,be out on line 6 of the k-1?

Re: Farming and fishing income

M-MTax — Sat, 15 Feb 2025 18:54:28 GMT

Did the trust receive a K-1?

Otherwise, Line 6 would be business income which could be derived from farming operations.