K-1 Irrevocable Trust

[Snaggletooth]

Goober Irrevocable Trust has the following income - Interest $500.00 Dividends $1000.00 LTCG $1500.00 STCL $200.00 for a total of $2800.00 This trust will have t pay tax on anything not distributed.

But the trust distributed $2200.00 to Goober. What should Goober's K-1 show?

1. Prorate all income types to the extent they occurred in the trust, i.e. Interest $393 Dividends $786 LTCG $1179 and STCL ($158
2. Exhaust in order of above, until the $2200 is absorbed: i.e. Interest $500, Dividends $1000 LTCG $700.
3. Exhaust by date - the sooner until exhausted. Information is not given, but most likely could embrace all income types.
4. ???

If there is a cite, I will be glad to research a link....

[Lion]

Read the trust document.

[Rapid Robert]

See Sec. 661(b). At first glance, it seems it is allocated proportionally. But remember that capital gains are usually allocated to corpus.

[Snaggletooth]

See Sec. 661(b). At first glance, it seems it is allocated proportionally. But remember that capital gains are usually allocated to corpus.

Thank you RR for the cite. And probably an answer that is more nearly correct.