Have Tax Questions? Ask a Tax Expert for Answers ASAP
Hi and welcome to Just Answer!
Is that long term capital gains?
Yes, it is long term gain.
See the workwheet on the page 9 - http://www.irs.gov/pub/irs-pdf/i1041sd.pdf
If you are using any tax preparation software - you should be able to locate that worksheet.
As long as total income is below $2300 - the marginal tax bracket for the trust is 15% - and long term capital gain are taxable at zero percent tax rate.
That worksheet provides you how calculations are done.
I did prepare the worksheet. I just wanted to be sure the tax rate was -0-. This is my first year preparing 1041's for trusts, and I cannot find any reference to the capital gains tax rate being -0- for trusts and estates.
Please see for reference - http://www.journalofaccountancy.com/Issues/2010/Oct/20102933.htm
Taxable income and tax liability. The tax calculation for estates and trusts with regard to long-term capital gains rates is the same as for individuals. Thus, just as for individuals, long-term capital gains and qualified dividends are currently taxed at 15% and, for trusts and estates in the 15% tax bracket (the lowest), zero. For trusts and estates, however, that bracket is available only if ordinary income is not more than $2,300.
Let me know if you need any help or clarification.