Schedule K-1? Need tax pro to answer question!?

I am not on good terms with my ex-inlaws. My son keeps receiving a Schedule K-1 (Partner's Share of Income, Deductions, Credits, etc.) from his grandmother's estate with a note "For you 2007 tax return". My son is 15 years old. He's never seen a dime of this money that was left to him from this estate. But he keeps getting a Schedule K-1 to file with his tax return. As he does not work or have other income - I am not sure if he needs to file a tax return for this or what to do. He's a "partner" of this partnership that includes other grandkids. The amount is about $19K. I assume it's a trust fund? Anyone have any advice?

Sounds like the trust has a clause in its agreement saying no distribution to minors until they reach legal adult age or the fund has to be used only for the medical or educational purposes before the beneficiaries reaching adult age.

Also, a trust can choose to pay income tax itself or pass the tax responsibility to its beneficiaries. Make sure you understand how the decision is made. I would suggest you to contact the trust/estate administrator or lawyer for more information. Make sure you get a copy of the trust agreement too.

Good that your son is older than 14 years of age. Otherwise, you will have one more thing to worry about - Kiddie tax - since passive income (such as interest and dividends - I assume most of the trust income is from interest, dividends and rental activities) is taxed at the parent's tax rate.

He needs to file a return and include the amount on the 1040. He will owe tax if its 19k.

It sounds like you need an a good tax professional. Contact a CPA or call H&R Block and tell you that you have a K1 for a dependent child and ask for an appointment with the most experienced tax prepared in the office.