For trusts that can distribute income to the beneficiary's tax bracket...

When filling out a 1041 for a trust, instructions are a little ambiguous on income distribution deductions. No mention of if distributions made directly to a third-party on the beneficiary's behalf to pay for the beneficiary's expenses, e.g. property taxes, bills, furniture..., count for deferring tax liability to the beneficiary, or if distributions have to be paid directly to the beneficiary for it to be included on a Schedule K-1.

Want clarification please.

1 Answer 1


Distributions do not have to be paid directly to the beneficiary.

Distributions to third parties are considered to be income to the beneficiary just like distributions made directly to the beneficiary.

In general, ANY distribution from a trust is supposed to be for the benefit of the beneficiaries of the trust.

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