Technical topics regarding tax preparation.
14-Nov-2018 6:58pm
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Section 663(b) says,"If within the first 65 days of any taxable year of an estate or a trust, an amount is properly paid or credited, such amount shall be considered paid or credited on the last day of the preceding taxable year"
Let's say $100,000 worth of assets were distributed to the beneficiaries on 1-15-2018 which was within 65 days of taxable year 2017. By making Section 663(b) election, does it automatically make $100,000 go on line 10 in Schedule B of Form 1041 and passed through to the beneficiaries personal tax return through Form K-1?
Or are there other factors needs to look into?
15-Nov-2018 2:59pm
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Anyone familiar with Section 663(b) please help. Thank you in advance.
15-Nov-2018 3:24pm
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taxprocali1 wrote:Or are there other factors needs to look into?
--Is it a complex trust or an estate?
--Were the distributions made in cash?
--Is there any amount to be entered on line 9 of Sch B (i.e., required distributions)
--Was there income of at least $100,000?
15-Nov-2018 3:54pm
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Distributions are deemed to be income first.
Was the amount distributed greater than, equal to, or less than the DNI?
Complex trust or Simple Trust
15-Nov-2018 8:52pm
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It is a complex trust
Distribution all in cash
Distribution is exactly equal to trust 2017 income which is $100,000
15-Nov-2018 9:23pm
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By making Section 663(b) election, does it automatically make $100,000 go on line 10 in Schedule B of Form 1041 and passed through to the beneficiaries personal tax return through Form K-1?
My guess is that it would be software driven. But, to answer the question, the $100,000 should show up on the K-1 of the beneficiary(s)
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