tgross
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Joined: 17 Jan 2016
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Posts: 1
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| Posted: 17 Jan 2016 at 14:24 | IP Logged
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I have a trust that I am administering for the first
time for 2015. I have about $2000 in income from a
rental property that belongs to the trust, so I need
to file a 1041. I am uncertain what the options are
for paying the tax on the gain. After deductions, the
tax amount is only about $100, because it falls in the
15% tax rate from Schedule G. There are 4
beneficiaries of the trust, but all 4 would be in a
higher marginal tax bracket than 15%. Next year, the
rental property will generate much more income and
will probably be in the 33% or 39.6% marginal tax
bracket on Schedule G. Here are my questions:
- It seems that I have 2 options: pay the tax for the
trust directly or split up the income among the 4
beneficiaries and let them pay. Is that correct?
- If I fill out Schedule K-1 for each beneficiary,
does the trust income just become taxable income for
the beneficiaries at their individual tax rates?
- For this year, can I just pay the tax for the trust,
and not generate Schedule K-1 forms for each of the 4
beneficiaries?
- For future years, do I have the option to select the
best option for that particular year?
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Topic: Trust tax payment
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