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Thread: Form 1041 Filing question.

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    Quote Originally Posted by arlo View Post
    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 at 12:16 PM.

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