Road Block with MA form B/R

[rjwilley52]

For the few who try to file form 1041 and  MA form 2, I got stuck at form B/R.  I solved it by entering 1.00 in this line on Form B/R "Percentage of Income"  In my educational training, percentage would be 100%.  Further, this box would not accept 0 when I entered 0 for income.  Took only 10 hours of reading directions, and then trial and error trying to enter 1.000 in this box.  RJW

[JamesGardner911]

What exactly are those questions referring to?  I made a partial distribution from an Estate of $30K to 1 of 7 heirs.  Is "Total Income" the $30K?    What is "Percentage of Income Taxable in Mass." and "Percentage of All Income"?    How do I know if its taxable?  Why doesnt Turbotax ask the right questions and answer these questions?

[rjwilley52]

So, I am uncertain.  I found these these instructions:   https://www.mass.gov/doc/2022-form-2-instructions/download  see page 13.  In my case the trust was capital gains and no amounts were distributed to the beneficiary.  It is unclear what the term total income means at the beginning part of the form.   As I wrote earlier, I probably spent 8 hours trying to figure out what the intent is and how to fill out the form.  The percentage is not a percentage but the decimal amount between 0 to 1.0 .  I entered 1.0 with zeros above and zero below.  Otherwise, I hit errors.  I reported the capital gain on line 3.  but not as total income above.  From what I can tell, the remainderman is a person who benefits should the beneficiary pass away.  The beneficiary did not pass?   Why do I have to fill this form out?  Good luck sorting this all out.

[rjwilley52]

One more note after re-reading.  I think if the heir received money from the trust, then the heir declares it on their personal income form if they live in Massachusetts.  If they live in another state, I am thinking that Massachusetts does not tax that money?  Think about Fidelity.  They hold billions for people outside of Massachusetts.  I imagine that Massachusetts cannot tax these incomes.     So where do you live (no need to answer)?  Where does the beneficiary live?

[JamesGardner911]

Thanks for the input.  I still don't understand what "Percentage of total income that was paid to beneficiary" and your guess is as good as mine.   Why would the percentage of something the Estate paid to a beneficiary be anything less than 100% unless it is asking how much is still owed to the beneficiary.  In this case it would be $30K paid of approximately $150K total inheritance or 20% (.20 in this case).

I am used to TurboTax asking me clear and concise questions and then answering that type of question for me.  

One of the heirs lives outside of MA, so I guess their "Percentage of taxable income" is 0% (0.0), otherwise its 100% (1.0).  But if that answer is that obvious, why is it even asked?  (They already ask beneficiaries address)

From the 2022 Instructions for Massachusetts Fiduciary Income Tax Form 2

Total Income
Enter the dollar amount of the income the beneficiary or remainderman received during the tax period covered by the return.
Percentage of Income
Enter the percentage of total income that was paid to/or accumulated for each beneficiary or remainderman.
Percentage of Taxable Income
Indicate the percentage of total income taxable in Massachusetts for each beneficiary or remainderman.

[RobertB4444]

The question is asking about total income, not total assets.  Percentage of the total income paid to the beneficiaries takes into account only the income received.  And it allows you to change the amount of the taxable portion and direct it all to one beneficiary or evenly among them.

@JamesGardner911 

[rjwilley52]

A follow up question.  Is "Income" the money that went directly to the beneficiary in their checking account?  This is as opposed to "capital gain" that is left in the trust, of which I paid the tax due from my personal funds.  The beneficiary "received no income" nor did I take any of the funds (it is discretionary).   I am letting this account grow (murdered by the recent stock market drop) for the time when I am no longer  able to care for my special needs dependents (I have two!)   Thank you for taking the time to reply.  I am hoping that more explanation of this form will follow in future years.

[cdpalmer3]

Yes this has been horribly buggy for years. Wrong information gets filled in by TurboTax, the 1% equals 100% if E Filing, etc is just wrong. Different returns get handled differently. Aargg. I would love to communicate with some one that understands what TT is trying to do here. 

[cdpalmer3]

Additionally, if 100% of the income is distributed to the beneficiary, TT declares and error that the form cannot be filed if the number is not in the range between 0.000 and 1.000. It does not state that is shifting 100% to 1.000 notation, and it declared that 100% is not a valid percentage between 0.0000 and 1.000%.  This is a bug. Switching between Forms and step by step seems to confuse the error checker. 

[cdpalmer3]

It occurred to me that the one case that the "bug" that I encounter might not be a bug is if you do not need to file Form B/R if there is only one beneficiary. The documentation about this form is not particularly robust.