K-1 from Rev Trust

[oceanlovin'ea]

One of my elderly clients decided it was too much for her to take care of her finances during last year. ML had her portfolio and had been taking care of her for years so she set up a revocable trust with them.

The cover page calls this a Schedule K-1, Grantor Trust Information Letter. (Not an actual K-1) THe next few pages tell me to enter the figures on Sch. B part 1 line 1, sch b, part 2 line 5, 1040 line 9b, etc. It does not tell me to use the K-1 entry to enter the information.

It also lists investment management fees and says to enter on Sch A, Line 22. Why would this not go on Form 4562?

Linda F

[Maribeth]

The charge is for their fees in managing her account, usually a % of the value of her portfolio. It is not margin interest or investment interest.

Maribeth

[BOB W]

One of my elderly clients decided it was too much for her to take care of her finances during last year. ML had her portfolio and had been taking care of her for years so she set up a revocable trust with them.

The cover page calls this a Schedule K-1, Grantor Trust Information Letter. (Not an actual K-1) THe next few pages tell me to enter the figures on Sch. B part 1 line 1, sch b, part 2 line 5, 1040 line 9b, etc. It does not tell me to use the K-1 entry to enter the information.

It also lists investment management fees and says to enter on Sch A, Line 22. Why would this not go on Form 4562?

Linda F

Grantor Trusts (Revocable) generally don't file a 1041. Appearantly this is also the case here. This is the general procedure, no K-1 and you just report on the 1040 line as if the rev trust did not exist. As far as the management fees go, it gets reported as investment expense, as they reported to you.

[oceanlovin'ea]

Thanks

for your answers. Too bad its not reported like a K-1. I have 35 more Schedule D transactions to enter. That brings the total to 146.

Thanks again.

Linda F

[S T]

I have had a few

Gotta Luv those "managed accounts" The fees charged the client are usually more than the client earns in a year through dividends, interest and stock sales.

Then the clients wonder why we charge for them! They don't realize that we have to enter all of those schedule D transactions!

Sandy