I am doing a 1041 for a complex trust. Because this years distributions exceeded the income for the year TurboTax prompted me to fill out a Schedule J manually.
Question 1: Do I even need to file a Schedule J?
The IRS instructions state the following:
Use Schedule J (Form 1041) to report an accumulation distribution for a domestic complex trust that was:
• Previously treated at any time as a foreign trust (unless an exception is provided in future regulations); or
• Created before March 1, 1984, unless that trust would not be aggregated with other trusts under the rules of section 643(f) if that section applied to the trust.
Neither of these are true, although my distributions do exceed the tax year's income. My limited understanding of Schedule J is that is somehow helps you balance excess distributions with previous year's undistributed earnings. That sounds like it could reduce taxes, but my research hasn;t gotten me to the finish line. The trust has undistributed earnings from it's inception in 2020-2023.
Assuming I DO have to file out a Schedule J:
I have filled out the Schedule J properly, but do not see how the numbers flow into my 1041. In fact when I print out the return, including all forms, Schedule J is not included.
Question 2: How should Schedule J impact my 1041, and be included in it?
Question 3: What needs to be done for a Pennsylvania 41 return if Schedule J is needed?
Thanks
