Question

in 2014, leon lopez funded lopez trust #3, an irrevocable trust, at first bank, 125 seaview, ... Question: In 2014, Leon Lopez funded Lopez Trust #3, an irrevocable trust, at First Bank, 125 Seaview, Nort... In 2014, Leon Lopez funded Lopez Trust #3, an irrevocable trust, at First Bank, 125 Seaview, Northwest City, WA 98112, for the benefit of his twin children, Loretta and Jorge. The trust’s tax ID number is 74-1243565. The trustee, in its discretion, is to dis- tribute income and/or principal to one or both of the beneficiaries and does not need to maintain separate shares. The trust is to terminate in 2025, when the beneficiaries reach age 35. Leon transferred corporate bonds and municipal bonds to the trust in January 2014. In 2015, the trustee distributed $8,600 to Loretta (whose address is 123 Maple Ave., Northwest City, WA 98115) and nothing to Jorge. Half of the trustee’s fee is to be charged to income and half to principal; gains and losses affect principal. Other current year information for the trust is as follows: Interest from corporate bonds $9,200 Interest from municipal bonds 6,800 Short-term capital gain on sale of bonds 300 CPA’s fee for preparation of prior year’s tax return 525 Trustee’s fee 800 Estimated federal income taxes paid from principal 2,400 Prepare a Form 1041 and Schedule K-1 for the trust. Ignore the alternative minimum tax.

Answer 1

Schedule K-1 (Form 1041)

Department of the Treasury Internal Revenue Service

beginning

2017

For calendar year 2017, or tax year

ending

Final K-1                          Amended K-1

661117

OMB No. 1545-0092

Beneficiary’s Share of Income, Deductions,

Credits, etc.

? See back of form and instructions.

Part III      Beneficiary’s Share of Current Year Income, Deductions, Credits, and Other Items 1 Interest income $13600 11 Final year deductions $8600 2a Ordinary dividends $8600 2b Qualified dividends Part I Information About the Estate or Trust 3 Net short-term capital gain A Estate’s or trust’s employer identification number 74-1243565 4a Net long-term capital gain B Estate’s or trust’s name Lopez Trust,at First Bank, 125 Seaview, Northwest City, WA 98112 4b 28% rate gain 12 Alternative minimum tax adjustment 4c Unrecaptured section 1250 gain 5 Other portfolio and nonbusiness income C Fiduciary's name, address, city, state, and ZIP code 6 Ordinary business income 7 Net rental real estate income 13 Credits and credit recapture $2400 8 Other rental income Check if Form 1041-T was filed and enter the date it was filed ? Check if this is the final Form 1041 for the estate or trust 9 Directly apportioned deductions 14 Other information Since the trust hs discre tion to distribute its inco Part II Information About the Beneficiary 10 Estate tax deduction $2400 F Beneficiary's identifying number me so only dividend dis G Beneficiary's name, address, city, state, and ZIP code Loretta,23 Maple Ave., Northwest City, WA 98115 ibuted is alowed as ded -duction, whereas shortt erm cg are retained *See attached statement for additional information. Note: A statement must be attached showing the beneficiary’s share of income and directly apportioned deductions from each business, rental real estate, and other rental activity. For IRS Use Only H   ? Domestic beneficiary                           Foreign beneficiary

For Paperwork Reduction Act Notice, see the Instructions for Form 1041.   www.irs.gov/Form1041              Cat. No. 11380D           Schedule K-1 (Form 1041) 2017

Schedule K-1 (Form 1041)

Department of the Treasury Internal Revenue Service

beginning

2017

For calendar year 2017, or tax year

ending

Final K-1                          Amended K-1

661117

OMB No. 1545-0092

Beneficiary’s Share of Income, Deductions,

Credits, etc.

? See back of form and instructions.

Part III      Beneficiary’s Share of Current Year Income, Deductions, Credits, and Other Items 1 Interest income $13600 11 Final year deductions $8600 2a Ordinary dividends $8600 2b Qualified dividends Part I Information About the Estate or Trust 3 Net short-term capital gain A Estate’s or trust’s employer identification number 74-1243565 4a Net long-term capital gain B Estate’s or trust’s name Lopez Trust,at First Bank, 125 Seaview, Northwest City, WA 98112 4b 28% rate gain 12 Alternative minimum tax adjustment 4c Unrecaptured section 1250 gain 5 Other portfolio and nonbusiness income C Fiduciary's name, address, city, state, and ZIP code 6 Ordinary business income 7 Net rental real estate income 13 Credits and credit recapture $2400 8 Other rental income Check if Form 1041-T was filed and enter the date it was filed ? Check if this is the final Form 1041 for the estate or trust 9 Directly apportioned deductions 14 Other information Since the trust hs discre tion to distribute its inco Part II Information About the Beneficiary 10 Estate tax deduction $2400 F Beneficiary's identifying number me so only dividend dis G Beneficiary's name, address, city, state, and ZIP code Loretta,23 Maple Ave., Northwest City, WA 98115 ibuted is alowed as ded -duction, whereas shortt erm cg are retained *See attached statement for additional information. Note: A statement must be attached showing the beneficiary’s share of income and directly apportioned deductions from each business, rental real estate, and other rental activity. For IRS Use Only H   ? Domestic beneficiary                           Foreign beneficiary

For Paperwork Reduction Act Notice, see the Instructions for Form 1041.   www.irs.gov/Form1041              Cat. No. 11380D           Schedule K-1 (Form 1041) 2017