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Level 3
April 8, 2025
Question

In Lacerte, how do I claim a deduction for DNI Form 1041 without distributing any income?

  • April 8, 2025
  • 2 replies
  • 11 views
I have tried entering a beneficiary, entering the % to distribute and overriding in Screen 7.3 "income required to be distributed" with "-1". Nothing prints on 1041 Schedule B. I do not want to generate a K-1.
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2 replies

sjrcpa
Level 15
April 8, 2025

So how can you justify a distribution deduction without a K-1?

The more I know the more I don’t know.
Level 5
April 8, 2025

The purpose of the DNI deduction is to give the trust a deduction for the income transferred to the beneficiary on Schedule K-1. The two are linked, so if no beneficiary should be receiving a distribution, then the trust doesn't get the DNI deduction and the tax is paid on all the trust's income at the trust level.