I don't have any other income, having using the trust money to live, do I need pay taxes on it? I started receiving the funds after got married, is my wife entitled to a half of it? She doesn't work.
My sister says that she needs pay taxes on her share every year since is her only income and is a kind of inheritance, I disagree.
Any advice will be appreciated.
You do have to enter the K-1 into your tax return. Amounts in boxes 1-8 are income generated by the estate and passed on to you as a beneficiary. The beneficiaries pay the tax. TurboTax will put the income and the deductions in the proper place on your tax return.
Generally, inherited property (including cash, stocks, and real estate) is not taxable or reportable on a personal 1040 federal return. The difference is, you are receiving a portion of the income the estate is generating, not the cash or property that was held by your aunt (that would not be taxable). That's why you have to put it on your tax return.
You do have to enter the K-1 into your tax return. Amounts in boxes 1-8 are income generated by the estate and passed on to you as a beneficiary. The beneficiaries pay the tax. TurboTax will put the income and the deductions in the proper place on your tax return.
Generally, inherited property (including cash, stocks, and real estate) is not taxable or reportable on a personal 1040 federal return. The difference is, you are receiving a portion of the income the estate is generating, not the cash or property that was held by your aunt (that would not be taxable). That's why you have to put it on your tax return.
Thank you so much. I am in a middle of a divorce, I start to receive the money in a separated account after the marriage, is my wife entitled to a half of it?
That would be a question for the attorney I'm afraid. I am sorry I can't answer that one.
Thank you sooooo much. You have helped a lot. I didn't know I need to insert it on my taxes and now there are 5 years I have been receiving it and didn't pay taxes on it...now I will need to check how to do it, maybe insert the full amount of the 5 years?
No, you have to put the K-1 with a 2016 date on it, on a 2016 tax return and so forth. You can buy prior year tax returns in TurboTax but they have to be paper filed.
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