I am using TT Business to prepare a small trust account return. In years past TT has distributed all income and capital gains through a K-1 and shown an "income distribution deduction" and thus never owed any taxes. This year the trust sold a property and has a large capital gain. However, TT is not distributing this gain and is showing taxes owed. What am I missing or doing wrong?
There is only one beneficiary and receives 100%.
I see on Sched D, part III, line 18a and 18b it is entering values in column 2 titled "Estates or Trusts" rather than in column 1 "Beneficiaries". I don't see what is telling it to do that. I understand the amounts shown, just not why.
You have to allocate the gain to the beneficiaries and also to income before you can distribute it (in the program).
did you actually distribute enough cash or other property to cover the distribution of the capital gain.
Thank you. That helped clear things up. Excellent reply with pictures so I knew exactly what I was looking for. TT had already filled in amounts, from brokerage statement, so I just missed seeing what needed to be done. TT Business is not very user friendly as compared to the Home and Business version. You can't even import brokerage statements. I have one that had 200+ transaction entries on a 1099b. Again, great answer! Thank you.