Level 3

So Carolina tax rule on SC1041 nonresident trust and beneficiary

Forum|Forum|2 years ago
May 15, 2024
2 replies
14 views

using Lacerte SC1041 is calculated taxes due on the SC income and applying withheld taxes to the liability. cannot force flow through of income to K1. if trust pays tax at trust level, shouldnt the k1 to beneficiary be zero? if so, does nonresident beneficiary still have to file a SC personal return?

Tax Talk

sjrcpa

Level 15

Simple Trust or Complex?

If complex, were distributions made?

What types of income does the trust have?

The more I know the more I don’t know.

G

garibianAuthor

Level 3

simple

rental income and portfolio income, but in SC it is rental income only.

BobKamman

Level 15

There was SC tax withheld? On rental income? That's unusual. This seems like a case of "there's the legal way of doing this, but then there's my way because I want to make it easier on the beneficiary, so I'm just going to ignore the law." But I might be wrong.

G

garibianAuthor

Level 3

i am sorry but you sound sarcastic, why? we had to withhold due to nonresident status. lacerte is computing tax on sc 1041 and technical support could not help me to have it merely pass through. i am trying to file correctly and therefore reaching out to a forum that knows SC. there is a law that says that if tax paid at trust level, beneficiary doesnt also owe tax or visa versa. i am trying to see what would be the correct route.

BobKamman

Level 15

OK. "The trust itself had to withhold tax on distributions to beneficiaries because the distributions are taxable to the beneficiaries, not the trust. But now we want the trust to pay the tax so the beneficiaries won't have to file." Now I understand.

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