Trust charitable contribution

Forum|Forum|1 year ago
September 26, 2024
1 reply
19 views

I'm preparing a complex trust tax return. The trust reports activities from three K-1s. Two of the K-1s reported charitable contributions for the year. When entered on Lacerte, the contribution shows up on the 1041 Schedule A line 7 with description "from K-1".

This seemed fine. However, I received a critical diagnostic warning that for e-file purposes the amount needs to be moved from the K-1s to the charitable deduction input area and to setup a charitable payee reflecting this information, which in turn tells me I need to file Form 1041-A, all for contributions totaling $356.

The diagnostic does disappear if I chose to not e-file the trust return, so that's (sort of) one solution. Has anyone else run into this problem and have any suggestions or solutions.

Lacerte Tax

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Best answer by PhoebeRoberts

That changed, so charitable contributions that come from pass-through entities are permissible 1041 deductions now. I could find you a cite if you wanted one.

For the 1041s I do, the contribution amount has never provided enough tax benefit to make it worth having to paper file the return. I just forgo the contribution by leaving it off the return entirely.

Accountant-Man

Level 13

Can trusts deduct charitable contributions?

For both trusts and estates, the charitable contribution is deductible only to the extent that the amount donated was paid or set aside from income. Charitable gifts of principal are not deductible. Dec 1, 2019

Trusts and estates cannot claim an income tax deduction under IRC §170 like individuals can. Instead, amounts paid, permanently set aside, or to be used for charitable purposes are deductible by estates or trusts only as provided in IRC §642(c).

** I'm still a champion... of the world! Even without The Lounge.

PhoebeRoberts

Answer

Intuit Community Champion

That changed, so charitable contributions that come from pass-through entities are permissible 1041 deductions now. I could find you a cite if you wanted one.

For the 1041s I do, the contribution amount has never provided enough tax benefit to make it worth having to paper file the return. I just forgo the contribution by leaving it off the return entirely.

Accountant-Man

Level 13

I bow to you, oh wise Phoebe.

** I'm still a champion... of the world! Even without The Lounge.

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