, Answering FAQ'sTurboTax Employee
Trusts (except living trusts, below) need to file Form 1041 (U.S. Income Tax Return for Estates and Trusts).
The administrator or trustee also needs to prepare Schedule K-1 forms for each of the trust's beneficiaries. Each beneficiary will then report their Schedule K-1 on their own personal tax return.
TurboTax Business handles Form 1041 and will also automatically generate the trust beneficiaries' Schedule K-1 forms. TurboTax Business is a Windows-only software program available as a CD or download.
What about living trusts?
You don't need TurboTax Business for a living trust. The trust's income and deductions are reported on your personal income tax return. For help deciding which TurboTax product you need for your personal taxes, see our Buyer's Guide.
Rather than distributing all assets after the owner's death, some estates continue to retain assets such as stocks or rental property.
The income earned by the estate's assets must be reported on an estate income tax return (Form 1041, U.S. Income Tax Return for Estates and Trusts). Schedule K-1 forms will also be needed after the income-earning assets have been distributed to the heirs, who will then to report the Schedule K-1 on their own personal tax returns.
TurboTax Business handles Form 1041 and will also generate the heirs' Schedule K-1 forms once the estate has been liquidated. In addition, the program will figure how much net income should be allocated to the estate's heirs. TurboTax Business is a Windows-only software program available in both CD and download formats.
Estate tax returns, on the other hand, are filed for estates worth over $5,120,111 (2012 figure) as of the date the estate owner died. All assets and debts at the time of death are declared, and if the value of the estate exceeds a certain limit, estate taxes are levied.
TurboTax does not support Form 706 (United States Estate and Generation-Skipping Transfer Tax Return), which is needed to file an estate tax return.