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Anyone leave after a year? Any advice?
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Also in past years expenses seem to netted against Interest 1st the Dividends 2nd and Capital Gains last is there some kind of rule about the order of operations here cause the better tax result for the personal taxes would be to back the expenses out of ST Gains or some other ordinary bucket before backing out of Qualified Dividends
Expenses should hit ordinary income first and then capital gain. It’s likely that there are non-qualified dividends that are eating up the expenses (taxed the same way as STCG). In this case, I would expect expenses to be allocated against ordinary then LTCG and STCL net, leaving the result to be passed out on the K-1 (limited by distributions).
Ok- so that changes it a bit. Distributions are mandatory to the income beneficiary and there can be discretionary distributions to non-income beneficiaries (possibly you?). In this case, I wouldn’t expect gains to be passed out, it is very rare on a continuing simple trust. Anyway, if you have more questions, feel free to DM- this is my area of expertise. 😂