Irrevocable Trust's K1 distribution

Forum|Forum|6 years ago
March 1, 2020
2 replies
17 views

Why the K1 distribution to the beneficiaries doesn't not reflect the same amount of payment as a income- benefit paid to them by the trust ? Thanks

TurboTax Business Windows

Anonymous_

Level 15

Can you provide more details? The K-1s will pass through the income (gain, etc) allocated to the beneficiaries, which is not necessarily the amount they receive from the trust.

Anonymous

why type of trust simple complex.

now here are some reasons. for account purpose a trust income from a partnership is the cash it receives from it. for taxes it's income that's reported on the K-1. if the trust has rental property , there must be a provision in the trust to distribute the depreciation to the nben's otherwise the denies get the cash income but the trust retains the depr. on the other hand if depr is distributed , the cah will probably exceed the income after depre. there is also the possibility that some of the cash to the beneies will be distruted after year end. there is code section 662(b) - 65 day rule for complex trusts.