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Level 3
February 19, 2022
Solved

Trust pays tax on final return

  • February 19, 2022
  • 2 replies
  • 15 views

The trustee wants to pay the tax from the trust account without K-1's.  Program generates diagnostic saying needs beneficiaries percentages because of capital gain.  HELP.  I just want to e-file and let the trust pay the tax on the final return.

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Best answer by sjrcpa

Because that's the way it's supposed to be done on a final return.

How about the trust makes estimated tax payments for each of the beneficiaries? This will be treated as distributions and then trust distributes the rest of the cash, after paying you.

2 replies

George4Tacks
Level 15
February 19, 2022

Is this a simple trust or a complex trust?

Answers are easy. Questions are hard!
joantaxAuthor
Level 3
February 19, 2022

complex. Profit.  The diagnostic won't let me file unless I pass through income to beneficiaries.

sjrcpa
sjrcpaAnswer
Level 15
February 19, 2022

Because that's the way it's supposed to be done on a final return.

How about the trust makes estimated tax payments for each of the beneficiaries? This will be treated as distributions and then trust distributes the rest of the cash, after paying you.

The more I know the more I don’t know.
Accountant-Man
Level 13
February 19, 2022

<<let the trust pay the tax on the final return.>> This is not allowed.

Besides, trusts typically pay tax at a higher rate than individuals. Why would the trustee want to pay more tax?

** I'm still a champion... of the world! Even without The Lounge.
BobKamman
Level 15
February 19, 2022

@Accountant-Man  Because the trustee didn't know and didn't ask, and the beneficiaries have already spent the money.  Happens all the time, and with increasing frequency now that there have been so many trust promoters for so long.  

Accountant-Man
Level 13
February 19, 2022

Does the trust have any money left?

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