Trust Income on K-1

[DMICPA]

Deceased Husband had a trust for wife and, upon her death, to only son.

Wife died Sept. 30, Son is now sole beneficiary.

On 2008 K-1, I believe son gets all income as none has been distributed to wife (Son's Mother)

Wife gets final 1040 on just her income, no trust income, no K-1.

Son gets 1040 on his income PLUS K-1 activity for entire year. I don't recall that there would be an allocation or two K-1s since no income was distributed to wife. Son gets entire amount.

Am I corrrect?

[taxea]

"Wife gets final 1040 on just her income,' ....from whom and why is wife getting a 1040? taxea

[newbie]

taxea, were you abused in the past and now you feel the need to beat on others?

[newbie]

Deceased Husband had a trust for wife and, upon her death, to only son.

Wife died Sept. 30, Son is now sole beneficiary.

On 2008 K-1, I believe son gets all income as none has been distributed to wife (Son's Mother)

Wife gets final 1040 on just her income, no trust income, no K-1.

Son gets 1040 on his income PLUS K-1 activity for entire year. I don't recall that there would be an allocation or two K-1s since no income was distributed to wife. Son gets entire amount.

Am I corrrect?

Do you mean wife files a final 1040? If amount of income requires filing then yes. As far as the trust income it would depend on what type.

[WhiteOleander]

Deceased Husband had a trust for wife and, upon her death, to only son.

Wife died Sept. 30, Son is now sole beneficiary.

On 2008 K-1, I believe son gets all income as none has been distributed to wife (Son's Mother)

Wife gets final 1040 on just her income, no trust income, no K-1.

Son gets 1040 on his income PLUS K-1 activity for entire year. I don't recall that there would be an allocation or two K-1s since no income was distributed to wife. Son gets entire amount.

Am I corrrect?

I think you need to read the trust document. It may say how this situation is to be handled. Otherwise, your plan sounds reasonable. Since she did not have use of the funds it can pass on the K-1 to the son. Who was the trustee? How do they say to handle it?

But, others with more experience on trusts may say differently.

[JCH]

I agree with WhiteOleander. You need to get a copy of the trust instrument.

[Mo Sheets]

Agree with others....a copy of the trust document is needed

Every trust is different in the way the funds are distributed. I agree with the other posts.....you will need to read the actual trust document. I am the trustee for a trust that is not to be distributed until the beneficiary reaches the age of 30, and even then the beneficiary is not eligible to receive the entire amount. Depending on the wording of the trust document, the beneficiary may or may not be entitled to the proceeds immediately upon her death. It may occur at a later time. Unless you have the trust document in front of you, it is difficult to determine the distribution and the timing of such.

Good luck!

Mo

[DMICPA]

Trust K-1

Thank you all for your advice.

The trust documents spell out that the son gets everything when the mother dies. In this case, the Son is in His 60s and Mom was about 90.

Mom always filed a 1040 because of Her other investment income and pensions.

Actually, the 1041 distribution rules say that the Mom would get the trust income distributed to Her up to Her death and the Son gets the residual from date of death if Mom took distributions. Son would report the K-1 on His 1040, Schedule E.

HOWEVER, in many situations, there may be no actual distribution of income until the yearly taxes are complete and then a distribution is taken. In my case, there was no distribution during the year, the Son gets all of the income etc. on a K-1 to him.

I recall that in partnerships, if a partner died, the K-1 for the entire year was included in the estate, not the individual deceased partner's final 1040. The 1041 appears to follow that rule of application.

Again thank you.

[Burke]

Assuming a distribution was actually made to the son within the 65-day period after the close of the trust tax year, then yes, it appears all the income would be on his 1040 tax return and none on the Mom's for 2008.