I have to file a Grantor type trust tax return. As I know a Grantor trust is ignored for income tax purposes, and all of the income, deduction etc. belonging directly to the grantors.
This year (2015) the Grantor trust received a distribution of income from another complex trust as a beneficiary. We didn't received a Schedule K-1 from the complex trust yet, just money came directly to the Grantor Trust bank account. How should report this distribution ($5000) on the Grantor trust tax return? I am using Turbo Tax Business. The software asked: Did you receive a Schedule K-1 from another trust?" When I answered "Yes" it created the Schedule K-1 where I have to fill all information about a complex trust. I am little bit confused: Should I create the copy of Schedule K-1 received from other trust on TurboTax and attach with 1041?? Or ignore the software and add the information directly to the Grantor's information letters?? Thank you!!