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Old 07-10-2016, 12:41 PM
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Join Date: May 2012
Location: Spokane, Washington State
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Grantor Letters & IRS Form K-1

I am the recipient of a Grantor Letter in respect of a trust, type unspecified, named "Metropolitan Creditors Trust". The trust was formed to settle the affairs of the bankrupt Metropolitan Mortgage company. I struggle to understand how to transfer correctly to my Federal tax return the information contained in the Grantor Letter.

It seems to me that, originating in a trust, the gain/loss information should be treated as if it originated on a Form K-1; but I cannot map to a Form K-1 format the Grantor Letter information in the format in which it is provided.
The format supplied by the trust administrator, using the grantor letter is:

INCOME:
Interest income.
Passive Income/Loss from partnerships.

LONG-TERM CAPITAL GAIN(LOSS)
Securities Sales & other Non-passive Transactions.
Gain(Loss) from Partnership, S Corps, and Trusts

OTHER INCOME.
Ordinary Income(Loss)

How do I map these category headers to Form K-1 boxes in order to file a correct tax return?

The process is not made easier by the fact that I use the HR Block tax software and the question and answer process offers few, if any, clues to resolving the Grantor Letter format into responses to the HR Block 'interview' questions.

I would be grateful for any assistance that may be offered, thank you.



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Old 07-12-2016, 08:13 AM
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Join Date: Oct 2010
Posts: 5,233
trusts which file Form 1041 Income Tax Return for Estates and Trusts, are required to send Sch K-1 to beneficiaries to report distributions of income during the year; The various types of income from these entities are to be reported on your individual income tax return on specific lines and in specific schedules.You need to review the Sch K-1 which you received from the fiduciary of the trust or estate to determine if the income amounts on the Sch K-1 agrees with the amounts you actually received during the year.for example, you need to report capital gains on Lines 5 and 12 of Sch D of 1040 and interest and dividends on Lines 8 and 9 of your Form 1040 or etc.



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Old 07-13-2016, 09:07 AM
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Join Date: May 2012
Location: Spokane, Washington State
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Thank you for your swift response to my e-mail request for help. Unfortunately it appears that I did not state my case clearly enough, so I will try again.
Further to the information in my previous e-mail I add the following comments:

The administrator of the trust under discussion does not provide a Form K-1, only a Grantor Letter. If there had been a form K-1 supplied along with the Grantor Letter, I would not need to request assistance, since that K-1 would map directly to the HR Block 'interview' questions.

My difficulty arises from my inability to determine where the Grantor Letter entries should be entered in the HR Block software, because I have no understanding of the mapping between the Grantor Letter items and Form K-1.

HR Block has been of no assistance in this matter, equally, the administrator of the trust cannot be expected to understand the HR Block interview process.

Does this discussion aid you in offering appropriate advice in response to my initial question?



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Old 07-13-2016, 01:42 PM
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[quote=Catullus;31681]
The administrator of the trust under discussion does not provide a Form K-1, only a Grantor Letter. If there had been a form K-1 supplied along with the Grantor Letter, I would not need to request assistance, since that K-1 would map directly to the HR Block 'interview' questions.=====>Correct. Agreed.

My difficulty arises from my inability to determine where the Grantor Letter entries should be entered in the HR Block software, because I have no understanding of the mapping between the Grantor Letter items and Form K-1.=======>>as mentioned previously you need to contact the software vendor ; I never ever used H&R block software; Items from a trust grantor letter go directly onto indicated places of the tax form. For example, in the case of the misc. deduction not subject to 2%, it would go under Itemize Deductions, under the Miscellaneous Deduction subheading. UNLESS the software allows the input of anything other than the 4 categories listed in the software -- none of the categories refer to any type of Trust info,

HR Block has been of no assistance in this matter, equally, the administrator of the trust cannot be expected to understand the HR Block interview process.Does this discussion aid you in offering appropriate advice in response to my initial question?==>As said I am sorry I can not help you this;I have no any iodea about H&R block interview process or etc basically, the Grantor letter that you received , I mean say, the Administrator properly provided you with this form, lists the areas of income, and if existing, expense. You simply need to transfer the information; for example , say, any taxable interest or taxable dividends are input by you in the Personal Income Interest and Dividends section - as if you received the income directly.For interest and dividends, in the Personal Form 1040 interview for Income, go to Interest & Dividends and as advised on the Grantor sheet, enter the monetary amounts as if reported on a Form 1099-INT or Form 1099-DIV. These flow to Sch B of 1040. I guess you may contact some more accurate professional help from a HR Block supervisor.



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