Form 1041 Filing question.

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  • arlo
    Senior Member
    • Feb 2008
    • 285

    #1

    Form 1041 Filing question.

    A trust has always paid any taxes due at the end of the year rather than make k-1 distributions. Now they want to issue K-1's instead of having the trust pay the taxes.
    My question is can this be done? I had in the back of my mind that you can not switch back and forth. Your input would be helpful.
  • Uncle Sam
    Senior Member
    • Jul 2006
    • 1462

    #2
    You will need to read the Trust document to determine if that is permissible.
    Uncle Sam, CPA, EA. ARA, NTPI Fellow

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    • Burke
      Senior Member
      • Jan 2008
      • 7068

      #3
      Originally posted by arlo
      A trust has always paid any taxes due at the end of the year rather than make k-1 distributions. Now they want to issue K-1's instead of having the trust pay the taxes.
      My question is can this be done? I had in the back of my mind that you can not switch back and forth. Your input would be helpful.
      As stated above, the trust document may control whether this is allowable. If it says distributions of income or principal may be made to the beneficiaries, then the pass-through provisions of Form 1041 will be available to them IF distributions were made within the trust's taxable year; or if elected, within 65 days after the end of that year [Section 663(b).] Since trusts use calendar years, the time for electing this option is now past. Also it is not available for simple trusts, which require the income to be paid out. Complex trusts may utilize this option.
      Last edited by Burke; 04-16-2018, 12:16 PM.

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