I received money from a trust. It was a 2006 distribution but I received the money in 2007. When do I claim it

Question

If you could send the IRS web site link that proves the answer, I would appreciate it very much. Thank you.

Answer 1

You should be getting a K-1 from the trust dated for 2006, thus making it reportable in 2006. I don't know the exact dates of what your distribution are-that kind of makes a difference for the answer. You may want to check with the trustee to see if you should be expecting a K-1 for 2006 or 2007. That will be the best way of finding out what you should do.

Answer 2

Did you receive a Form K-1? Check the fiscal year on the K-1. If its marked "2006" and has a 12/31/06 year end, youre supposed to include this income on your 2006 tax return. If its marked "2006" but has a year end of 1/31/07, for example, this can be included on your 2007 tax return.

If you received a 2006 Form 1099, it would also need to be reported on your 2006 tax return.

Answer 3

If it is a "simple" trust requiring income payout the timing of the payout to you does not matter. If it is a "complex" trust the trustee can elect to tax it to you for 2006 under a 65 day rule. This is usually better because trusts have higher tax rates than individuals. See link below.

http://www.irs.gov/pub/irs-pdf/i1041.pdf

Answer 4

I also had that happen, because it was a 2006 distribution, you must claim it for 2006. Who distributes your money, ask them.

Answer 5

You taxes in 2008, if you owe money. Check with the estate attorney and see if you donor use his unified credits during his lifetime,etc.