Figuring Income Distribution Deduction in simple trust

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  • #5245
    Sjenkins
    Participant

    Thank you for your help
    I am preparing a tax return for a Credit Shelter Trust (simple trust). The trust has $4270 of ordinary dividend income for 2019. There was a real estate sale in 2019 of a vacant lot reported on form 4797. This sale resulted in a capital LOSS of $59110 giving me a total income loss on lines 9 and 17 of $54840.
    On schedule B this transfers to a $0 for DNI on line 7. I have not distributed any income during the 2019 year. Is there any income distribution deduction
    that needs to be reported for 2019 on a K-1?

    Thank you again

    #7222
    Lewis-H
    Participant

    Estates and Trusts are permitted to take a deduction on their tax return (Form 1041) for certain income that is distributed to the beneficiaries. This income is then reported to the beneficiary on a Schedule K-1 (Form 1041) Beneficiary’s Share of Income, Deductions, Credits, etc.

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