Legal Question in Tax Law in New Jersey

Are estates required to distribute income currently? I am asking this because an estate for which I am preparing a Form 1041 had income in 2010 but did not distribute it until 2011. I and the executor would like to show the income being taxable to the beneficiaries via 2010 Forms K-1.


Asked on 2/10/11, 7:18 am

1 Answer from Attorneys
Walter LeVine Walter D. LeVine, Esq.

This is up to the trustees and depends what the trust agreement may say on the subject. While usually income is distributed throughout the year, it can be anytime, and can even be after year-end. If income is to be passed through to beneficiaries, who will then be responsible to pay the taxes, certainly the distribution should be made in sufficient time to allow the funds to be used to pay the taxes. Feel frree to contact me directly to discuss this, as I draft trust agreements, am a trustee and beneficiary and a tax preparer familiar with 1041 returns and K-1 forms.

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Answered on 2/12/11, 9:42 am


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