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TenOC's avatar
TenOC
Nomad
Dec 01, 2015

Trust Tax Question 1041 - K-1 2015 - 2016 SOLVED

This question may not be appropriate, but since I RV full time I will ask my RV friends for help. If inappropriate please remove, and I am sorry.

How to report distribution of trust paid made in 2016 (made within 65 days after the end of the 2015 tax year) but treated as having occurred in 2015 (last year)?

I understand "Fiduciaries of estates and complex trusts have the option to treat certain distributions as having occurred last year. An election can be made with respect to distributions made within 65 days after the end of a tax year."

My DW's (who died a few years ago) Trust plans to make a distribution in Jan 2016 and wants the distribution to be treated as having occurred in 2015.

(1) How is this reported on the 1041? I assume it needs to be reported in 2015 to be treated as occurring in 2015. But I do not think Turbo Tax software will allow me to report a sale of stock that takes place in 2016 on the 2015 Capital Gain sheet.

(2) How is reported on the beneficiary's K-1. I assume it need to be reported in 2016 because the beneficiary is on a cash bases.

I have ask Turbo Tax the same question, but they have not answered yet.
Seeking Advice
  • TenOC's avatar
    TenOC
    Nomad
    Dec 01, 2015
    I found the answer. The 65 days only applies to income RECEIVED during the tax year. For example if I get a dividend on Dec 30th I would not have time to distribute this dividend to the beneficiary until the next tax year. I have 65 days to make the distribution.

    Thanks All
  • darsben's avatar
    darsben
    Explorer II
    Dec 01, 2015
    hypoxia wrote:
    westend wrote:
    I'd suggest to call the IRS help line and ask your questions.

    Wear a helmet when you call the IRS, you'll be banging your head against the wall. To get to a level of help that actually has knowledge can take many hours or days.

    And the answers the IRS gives are not binding on the IRS and if the info the IRS gives you is wrong then you pay the tax owed (which is okay) but also a penalty for making the mistake which the IRS caused.
  • hypoxia's avatar
    hypoxia
    Explorer
    Dec 01, 2015
    westend wrote:
    I'd suggest to call the IRS help line and ask your questions.

    Wear a helmet when you call the IRS, you'll be banging your head against the wall. To get to a level of help that actually has knowledge can take many hours or days.
  • wildtoad's avatar
    wildtoad
    Explorer II
    Dec 01, 2015
    I suspect you will get a k1 prior to the filing deadline in 2016 and it will include instructions. Turbo tax will most assuredly be able to accept the information.
  • gbopp's avatar
    gbopp
    Explorer
    Dec 01, 2015
    westend wrote:
    I'd suggest to call the IRS help line and ask your questions.


    Don't expect a lot of help for complex questions. :E
  • westend's avatar
    westend
    Explorer
    Dec 01, 2015
    I'd suggest to call the IRS help line and ask your questions.
  • darsben's avatar
    darsben
    Explorer II
    Dec 01, 2015
    Please see a tax professional preferably a tax accountant about your situation.
    This is not a time to cheap out. You do not want to misfile your taxes as the IRS will penalize you and that can get VERY expensive

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