bgallaghercpa
Level 2
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I’ve got a nonprofit client that was named a 50% beneficiary in a deceased individual’s will.  The succession assets were transferred to a charitable trust.  The Trust didn’t disperse any funds in 2019.  In March 2020 The Trust disbursed $200,000 and sent a letter to the nonprofit requesting that it provide a signed receipt of the donation as required by the IRS.  Then in September 2020 the Trust issued a 2019 K-1 (1041) to the nonprofit showing interest income, dividends, and long term capital gains totaling about $170,000.  Does the nonprofit treat the distribution from the Trust as a donation (like the initial letter indicates), or is the nonprofit required to report the income as UBIT in 2019 per the K-1 received?  If it is UBIT, where does the K-1 get entered in the Exempt Org module?

Thanks for the help!

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