Trust refresher

[JJStephens]

Well garsh. I haven't done a trust return in about 8 years ... and now have two in the last couple days. Both involve rentals that were part of a living trust created by the now-deceased parents of a couple long-time clients

 

This time of year I don't have time to go back to school on this but I'm not comfortable with winging it either. I'm good with Sch E but the 1041 itself has me a tad nervous. Anyone have a tip on where I can get a a quick-and-dirty refresher?

[Terry D EA]

First order of business here is to obtain the trust instruments and read them completely. Doing so will give great insight as to the related tax issues with the trust.

[Abby Normal]

Quick & dirty refresher:

 

If it distributes principal and income it is a complex trust. Income only distributed is a simple trust.

If not all the income is distributed, some income stays in the trust to be taxed.

Capital gains/losses usually stay in the trust until final return.

Always read the trust document.

[JJStephens]

This got back burnered ... but now can't be delayed any longer (deep sigh).

 

Turns out there was no rental activity. They simply sold the property with only a small gain. Since there was no income (only a distribution of the proceeds from the sale), is a 1041 required?

[Catherine]

So is there any more trust -- or did the sale finish it off? 

How are the proceeds going to be distributed to the beneficiaries if not through a K-1?

 

 

Looks to me like there IS a return; either final, or final with K-1's, or non-final with K-1's.  Sorry.

[JJStephens]

See. That's what I hate about this forum. I never get the answer I want. All I ever get is the right answer. 

 

Seriously, thanks Catherine.

[OldJack]

>>They simply sold the property with only a small gain.<<

 

That is the income and/or taxable income distribution that is reportable on the 1041.  Distributions of property value are not reported as a 1041 is an "income" tax return.

Edited April 13, 2015 by OldJack

[JJStephens]

Each time I talk with the family the details change. They started out telling me what they hoped would happen and eventually got around to what actually transpired. Turns out they were never successful in getting a renter in the property and they ended up selling it at a loss. The niece who is been administering the estate has been out having two surgeries in the past two weeks so contact has been as spotty as the details.

 

The 15th can't get here quickly enough. Between two kidney stones, a sinus infection and the attendant meds on top of tax work, I'm toast.

[Catherine]

See. That's what I hate about this forum. I never get the answer I want. All I ever get is the right answer. 

 

Seriously, thanks Catherine.

 

Between two kidney stones, a sinus infection and the attendant meds on top of tax work, I'm toast.

 

 

I have the SAME problem -- I get the *right* answers, not the ones I want!  

 

I spent all last week working *only* 9 hours/day  with a sinus infection and 102 fever - I feel your pain!  It's slowly improving and I made it through the class I taught tonight without losing my voice, too.  One of my students brought his taxes since he couldn't figure them out with Ttx.  One additional extension for tomorrow.

 

Snack and bed for me.