Irrevocable Trust Tax

[USER987456]

I have an irrevocable trust with stock that I sold in 2024. TurboTax business wants me to pay the tax through the trust filing to the IRS, how do I move the tax burden to my own account that is presumably at a lower tax rate than the trust tax?

[M-MTax]

If this is a grantor trust, your issue is solved because you are considered to be the owner of the assets and, as a result, pay any tax due on the income the trust earns.

If otherwise, you file a 1041 with an associated K-1 and pass the gain through on the K-1 (if you have the authority to distribute capital gains).

Do you know what type of trust you have?

[USER987456]

Yes, we manage the trust and create the K1 which we report on our 1041.  I am trying to figure out how to have all dividends and long term gains go to the K1 instead of TurboTax having us pay the income tax through the trust to the IRS at a higher rate?

[M-MTax]

You simply have to make a distribution in the program. 

[USER987456]

Ok... these are capital gains so where is best place/procedure to report in the the trust return? Thank you,

[M-MTax]

If you want the gains to flow through to the beneficiaries, you'll have to allocate the gains BOTH to Income AND to the beneficiaries in the program.

[USER987456]

Got it! Thank you...

Do I need to attach 1099 B to the 8453 if I report LTCG Section D as one amount on turbo tax desktop, which I choose to do. How do I go back and enter the transactions individually so I don't need to include 1099B? Thank you!