Trust Return

[DebsTaxes]

I have a new client, a trust return. Almost all income is distributed, only holding back for misc. expenses. The trust wants to make sure they distribute enough so the trust doesn't owe any tax. Am I correct that they should make sure the amount they hold back not exceed $600 after issuing distributions and expenses?

[Koss]

Exemption

For a trust, the exemption is either $100 or $300. It depends on the type of trust.

There is no standard deduction for a trust.

The $600 exemption is only applicable to an estate.

BMK

[Maribeth]

I have a new client, a trust return. Almost all income is distributed, only holding back for misc. expenses. The trust wants to make sure they distribute enough so the trust doesn't owe any tax. Am I correct that they should make sure the amount they hold back not exceed $600 after issuing distributions and expenses?

First of all, you need to determine if it is a simple trust or a complex trust. You will need to look at the trust documents. The answer to that question will determine what shows up on the K-1.

Maribeth