Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 11-16-2017, 05:30 PM
Junior Member
 
Join Date: Nov 2017
Posts: 2
Final estate 1041 with Cap Loss

Final Estate return 1041 has interest, dividends and a current year net capital loss (not a carryover from prior years) resulting in negative Total Income. (How?) Will these items flow through to K-1? My understanding is that this loss should NOT(?) be included in DNI, but all final year income should be passed to the beneficiaries via K-1. I am confused as to where/how/if I report it on K-1 (box 1, 2a, and 4a as a negative amt?) if I don't include the Cap Loss in DNI ? DO I skip DNI calculation for the final 1041?



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 11-17-2017, 07:30 AM
Moderator
 
Join Date: Oct 2010
Posts: 5,085
Final Estate return 1041 has interest, dividends and a current year net capital loss (not a carryover from prior years) resulting in negative Total Income. (How?) Will these items flow through to K-1?= Working on the Estate form 1041 that has a capital loss incurred in its final year, which should result in the capital loss being allocated 100% to the beneficiaries, with none be allocated to the estate, per the schedule on page 2 of sch D.Since this is a final return, in which case the losses will be distributed out to the beneficiaries on Line 11 of their K-1s as final year deductions. The $3kcapital loss still appears on page one of the Form 1041 even in the final year. That loss gets added back to the adjusted total income so the DNI on page 2 of the 1041 includes the correct amount. And, as long as the K-1, box 11, has the amount, then the full amount will flow to the beneficiaries individual returns. You can also view the DNI diagnostic worksheet to see how the income is being distributed to the beneficiaries. it belongs on Line 4. To the extent not used on a final 1041 it passes thru to the beneficiaries on K-1s. This doesn't mean you do not show it on tthe 1041


My understanding is that this loss should NOT(?) be included in DNI, but all final year income should be passed to the beneficiaries via K-1. I am confused as to where/how/if I report it on K-1 (box 1, 2a, and 4a as a negative amt?) if I don't include the Cap Loss in DNI ? DO I skip DNI calculation for the final 1041========> capital losses are normally excluded in figuring DNI unless they enter into the computation of any net capital gain that is distributed or must be distributed during the year.Also any Capital Gains will not automatically be included in DNI. However, Capital Gains can under certain conditions be included in the DNI calculation



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #3 (permalink)  
Old 03-17-2018, 05:32 PM
Junior Member
 
Join Date: Nov 2017
Posts: 2
1041 items to K-1

Re K-1:
So $1,500 cap loss flows to line 11C.
But do I show $200 int income on line 2 and $600 admin exp on line 11a (excess deductions) OR show no int on line 2 and $400 on line 11a ?



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #4 (permalink)  
Old 03-18-2018, 12:15 AM
Moderator
 
Join Date: Oct 2010
Posts: 5,085
Quote:
Originally Posted by ccLee View Post
Re K-1:
So $1,500 cap loss flows to line 11C.
But do I show $200 int income on line 2 and $600 admin exp on line 11a (excess deductions) OR show no int on line 2 and $400 on line 11a ?
The box 1 reports the beneficiary?s share of the taxable interest income.I guess the excess deductions on termination occur on line 11a only during the last tax year of the estate when the total deductions are greater than the gross income during that tax year.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Final 1041 for a irrevocable trust century100 Estate Planning 1 03-28-2017 05:15 PM
Final Form 1041 Kasanami Income 3 03-16-2017 06:22 PM
Estate Tax 1041 minim84 Trusts and Gift Tax Returns 1 02-25-2017 02:30 PM
Distribute 1041 estate loss to heirs on K-1? Executor12 Trusts and Gift Tax Returns 1 07-24-2015 07:07 PM
Repayment - Estate income 1041 cltaxing For 2014 0 01-29-2015 03:45 PM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning