1041 - stock transferred to one of the beneficiaries

[David]

I am preparing a 1041 for a decedent's complex trust. i am reporting all dividends and stock gains/losses to the trust and showing that all earnings have been distributed to the beneficiaries.

Everything in the account has been distributed to the beneficiaries.

One of the beneficiaries wanted a particular stock transferred to him and this was part of his distribution.

Distributions of cash from other stock sales and dividends as well as the stock distributed to the one beneficiary were equally distributed.

Do I need to report the distribution of the stock differently or just report distribution amounts equally for all beneficiaries?

Also, there is $81K capital gain from stock sales. Doesn't this get allocated to the beneficiaries' K-1 since everything was distributed to them? The program is treating the capital gain as trust income and taxed at the trust level.

Thanks.

[Lynn EA USTCP in Louisiana]

Is this the final trust return?  I think the return needs to be marked 'final' in order for the capital gains to flow to the bene's k-1's.

[Abby Normal]

Just report the distributions equally.