Have a Tax Question? Ask a Tax Expert
The trust needs to file a return and report the appropriate information - including the amounts distributed to the beneficiaries. Each beneficiary will receive a K-1 showing what they need to report on their individual returns.
Does the recipient also pay tax or is the tax paid by the Trust then?
What is the form that we file for the Trust Tax Return?
The trust should not pay any tax. It distributes the income to the beneficiaries and the beneficiaries pay any tax due.
File Form 1041.
I put the 1099-R taxable amount on Line 8. (80k)
There was also Tax withheld on the 1099 in the amount of approx 20k. Does this go on the 1041? or the individuals return then? If it goes on the 1041 we have a refund due. That seems strange when you say that the trust does not pay taxes.
I put the income distribution of 120k on line 18 which would agree with the total distributtion which is greater than the amount taxable. Is this correct.
What dates should I use for the tax return. Can I use the calendar year?
thanks for all your help and sorry for all the questions.
Put the tax withheld on line 24b - that will allocate it to the beneficiaries along with the income.
PS Yes you should use the calendar year.
You have it correct - the withheld tax gets allocated to the beneficiaries, the trust should pay no tax, and the beneficiaries will report both the income and the withheld tax.
Not to worry - that is where it goes.