1041 Simple Trust

[David]

Well I must be getting brain fry.

TP is required to file a tax exemption trust income tax return. Income is required to be distributed to the beneficiary who is a surviving spouse.

The only income is $400 for storage fees- she rents space for people to store their collectible cars.

The K-1 is showing all of the $400 as taxable to the TP. Shouldn't $100 be the amount that is taxable income on the K-1? Doesn't she get the benefit of the $300 exemption?

Thanks.

[jklcpa]

Did you check the box for 'Simple Trust' upper left corner of page 1? That should put the $300 exemption on line 20.

Is DNI populating?

[David]

Did you check the box for 'Simple Trust' upper left corner of page 1? That should put the $300 exemption on line 20.

Is DNI populating?

Yes, I checked the box for simple trust and it is populating DNI.

I thought the $300 exemption would reduce the TP's taxable income on the K-1 but I guess the exemption is only for the trust.

Thanks.

[DonnaA]

Your second thought is correct. The exemption applies only to the trust.