ESBT Issue with multiple states and non-ESBT income

Forum|Forum|3 years ago
June 5, 2023
2 replies
13 views

I am trying to prepare a 1041. The trust owns shares of an s corp that made an ESBT election.

The income from the ESBT is from a different state than the resident state of the trust. The resident state has additional investment income. I cannot seem to get the correct state income for each state. Plus, the K-1 income from the s corp is being counted twice on the federal return when I switch to a complex trust type return.

Anyone have any solutions or workarounds?

Thanks.

Lacerte Tax

This topic has been closed for replies.

sjrcpa

Level 15

I think you have to do two 1041s in Lacerte - one for the ESBT part and one for the complex trust part. Then mush them together using overrides to get the total tax. Then paper file after you insert all of the correct pages..

The more I know the more I don’t know.

N

NilguhmAuthor

Level 2

I will give that a try.

Thanks.

sjrcpa

Level 15

Good luck. It was no fun when I had to do it years ago.

The more I know the more I don’t know.

T

TaxGirl3

Level 5

See Lacerte instructions here: https://proconnect.intuit.com/support/en-us/help-article/federal-taxes/electing-small-business-trust-esbt-corp-portion/L17BKKVez_US_en_US?uid=lilshery

States can have very different tax schemes when it comes to ESBTs and you may need more than 2 files (I have a 1041 with a federal file 'S-Portion', a federal file to incorporate the ESBT tax and non-ESBT items, and a separate state file).

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