Note: I sent this reply(question) via Email which was probably incorrect---I was confused as how to send a follow-up question.
Anyway, the question is:
Since complex trust rules would apply, does that mean that I file a 1041 rather then the normal 5227 or both? And apparently, a form 4720 is also required to compute the tax. But where in the instructions (1041 or 4720) does it specify that the distribution to the beneficiary is deductible? And finally, is the amount of (presumed) excise tax equal to the "net" income (after distribution to the beneficiary)?
Sorry for the confusion,
And-----one final question !!
The K-1's in question (qty 2) identify the "unrelated taxable business income" as negative numbers, in both blocks 1 and 20. (Presumably, the negative "ordinary income" in block 1 will pass through to me as a passive loss on Schedule E)
But I digress---Even though the UTBI is negative, does the excise tax still apply?
Note: Maybe this is the reason for the IRS to impose this tax via Form 4720 !!??
Please answer/comment on the foregoing.
Thank you in advance for your assistance---You've been very helpful!!!
Sorry for this "reply" but------as asked in my most recent inquiry, "Even though the UTBI is negative, does the excise tax still apply?"
i.e. in blocks 1 and 20 on the K-1 to the CRUT (issued by the company in which the CRUT is invested), the number is XXXXX!! (specfically -$8,296.00)!!
Correspondingly, does the excise tax apply to both positive and negative amounts? I am confused on this, since I've never encountered this UTBI problem before.
Your most recent correspondence did not seem to address this question.