final distribution out of complex trust to beneficiary

Technical topics regarding tax preparation.
#1
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I have a client that is filing their final return, form 1041, and is a Complex Trust. The trust had no income of any kind for the year. The money in the trust was and has been previously taxed, it was the remaining cash. The trust has 3 beneficiaries, it was a family trust. It is the mother and two adult children; the father died long ago and established this trust. The mother distributed all remaining cash to her, and the children agreed and then closed the bank account and the trust. Since the cash distributed to the mother was 100% previously taxed, I am not clear that the distribution to the mother needs to be reflected on the final return to be filed.

thank you.
 

#2
TheGrog  
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No income means no distribution deduction, as that only shows the amount of current year income to be shown on the K-1s.

The trust may have final year deductions to share out though, and those usually get put on K-1s in the same proportion as the distributions for the year. The deductions going 100% to the mother may not be accurate, although final year deductions show up infrequently enough that I don't remember if there is some other special rule for them or not.
 


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