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Received Schedule K1(1041) for a disbursement from a trust.

(Box 12 A was populated...
Received Schedule K1(1041) for a disbursement from a trust. (Box 12 A was populated Alternative Min Tax Adj) on the K1 form. I Filed a 1040 for 2017 tax year thru turbo tax. The 1040 shows the name of the trust on Schedule E Part III (Income or Loss from Trusts & Estates) with its Fed Tax ID. However, nothing else is populated in this section including any dollar amount. As far as other income I have been in school and my other income only came to be 5K for the entire year. Did turbo tax make an error? I a not sure why this disbursement it is not taxable income to me. The tax from the trust (1041) shows the disbursement on line 12, as Fiduciary fees if that has brings any clarification. Thanks
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Answered in 38 minutes by:
3/11/2018
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 32,689
Experience: Taxes, Immigration, Labor Relations
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The amount reported on K1 (1041) under code "A" - is an adjustment for minimum tax purposes.

That amount will ONLY used in you are subject to AMT and the form Form 6251 is included into your tax return.

If the tax preparation software determined that you are NOT subject to AMT - there is no need for that adjustment.

So far - I would not worry about that amount.

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Customer reply replied 1 month ago
I double checked and turbo tax did not include a form 6251. Do you know what would make a person not subject to AMT?
Are disbursements for a fiduciary fee normally not taxable to the fiduciary?

I would place an opposite question - what makes a taxpayer a subject to AMT?

The 2017 exemption amount for a single taxpayer is $54,300 - so income below that level would not trigger AMT.

Even above that threshold - AMT is not necessary and depends whether there are any preference items - those are - long term capital gains, state taxes, interest deduction on equity loans, etc.

.

Regarding payments the trust pays to teh fiduciary for services - these are deductible for the trust and taxable for the fiduciary.

Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 32,689
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