trust and estimates

[WITAXLADY]

client receives estimated form - had to pay penalty last year as put money into trust without letting me know they even had one!

Haven't put any $$ in yet - recommended they put in enough to cover prop tax = 0 as pay the tax and then gift $13,000 for the 2 years before and after.

So no additional,,, so she fills out form and thinks she should pay $5,000 in tax.

Any reason why? Only if someone is going to put money in?

Thank you,

D

[WITAXLADY]

and then did I do last year's wrong? If they put $40,000 into trust from personal - he gets no deduction but the Trust should only pay on earnings - no tax on principal contributed? only earnings?

Now I am confusing myself - help please to clarify this.

Thx D

[Terry D EA]

First, what kind of trust is this? Second, obtain the trust instrument. I have said this many times on this board getting the trust instrument will reveal to you the taxation of the trust. If your client had the trust last year, a return may need to be done and the possibiity of a late filing penalty exists.