Issue:
Complex trust. Fixed required distribution which is > income produced.
Trustee has full flexibility on retaining income, etc., only requirement is the fixed distiribution.
This is sample numbers and problems.
Income earned $25,596 DNI
Charitable $250
Fixed 70k distributed to 2 beneficiaries equally.
Trust 10% tax rate maximized so trust DOES NOT distribute $2,750 of income and pays low 10% tax rate
Income distributed 22,746 ($25,596 - $100 exemption - $2,750 retained income)
There seems to be no way to input, manually or otherwise, to show:
Corpus nontaxable distribution of the additional $47,254 ($70,000 - taxable k1 distributed of 22,746)
Tier 1 is $0 since no income is required to be distributed.
Tier 2 is $22746
Schedule B line 9 is required income distribution = $0 (no income is REQUIRED to be distributed)
Schedule B line 10 is Other Amounts Paid, Credited, or Otherwise Required To Be Distributed = I can't put in the $47,254 because it adds it to income distribution and I don't see where to offset it. Plus if I try it, Turbo
then doesn't allow the trust to retain $2,750 of income so trust pays 10%....it distributes all income to beneficiaries.
What am I missing?
Thanks