Generation-skipping distribution. Where do I note this on 1041 and K-1?

[apprentis490]

I have a one time pay out to a nephew.  This is a generation skipping requirement of the trust.  Where do I indicate this on the 1041 and his K-1?

[tagteam · Accepted solution]

" Where do I indicate this on the 1041 and his K-1?"

On Form 1041, this is nothing more than a question regarding whether any beneficiaries are skip persons. 

In TurboTax Business, if you checked the appropriate box when entering your nephew's information as a beneficiary, the program would have checked the "skip persons box" for you (obviously, the "Yes" box would be checked).

Beyond the foregoing, there is nothing involving the 1041 or K-1 that needs to be done. However, you may have to prepare a 706-GS(D-1) and TurboTax does not support that form (see instructions at link below).

https://www.irs.gov/instructions/i706gsd1

[ScruffyCurmudgeon]

To supplement @tagteam 's answer - just so you understand, the Form 706 and 706-GS are not part of the Income Tax system, nor is Form 706 Gift Return.