Trusts

[llysongtseng]

When do K-1's have to be mailed out?

for a trust-
if the trustee elected to have their trust/estate pay for any taxes that will be incurred, what are the chances that a beneficiary would have to include any of the distribution as income? i do understand though that that is what a k-1 is for. i just assume that a beneficiary wouldn't claim it as income because the taxes have been taken care of from the estate side and the government cannot double dip and make you pay taxes again on the same monies.

is there a chance the beneficiary would be able to get part of the taxes paid back or would any refund go back to the trust account?
taxes taken out was for fed, fed estate, gst, and state tax.

thanks

[Koss]

Estate Return

Schedule K-1 is issued to the beneficiary, and sent to the IRS, to report, among other things, distributions from the Estate.

In general, inherited property or money is not treated as income, and would therefore be a nontaxable distribution. It may show up somewhere on the K-1, but if it is not taxable income to the beneficiary, then it will not carry to the beneficiary's Form 1040.

What are we dealing with here? Are the assets of the estate generating significant income prior to distribution to the beneficiary?

If this is the case, the some part of the distribution may in fact be taxable to the beneficiary. But the payment of income tax by the estate, on that same income, may also flow through to the beneficiary as a deduction.

I can't really address this any further without more details. What kind of income is it?

And are you certain that the estate has paid income tax on money that was distributed to the beneficiary?

Burton M Koss

[llysongtseng]

as far as generating income im not sure of, as last i knew this money was still earning some interest.
the attorney sent a portion of the claim to the beneficiaires but not the total amount. and yes im am sure that the taxes are paid for because the attorney also addressed the $ amounts that was withheld to pay the taxes...which was for federal, estate, gst, and state tax.

[OldJack]

When do K-1's have to be mailed out?

For a Trust, the 15th day of the fourth month following the close of the Trust tax year any form 1041 must be filed with any 1041-k1's attached and issued to beneficiaries.

The taxes you refer to sound like "Estate taxes" and probably not refundable in any way to the beneficiaries although a deduction for a prorated portion of the taxes that might relate to taxable income in respect of a decedent may be deductible by the beneficiaries as a misc itemized deduction.