Question
Why would land rent in a decedent's trust reported on 1041 show on line 5 of the K1 as other portfolio income rather than line 7 as net rental income?
This is the initial year of a decedent's trust with 5 beneficiaries sharing equally. The decdent has had land rent for years, no expenses other than property taxes. There is nothing to manage. Clearly a passive rental. The rent is reported on Schedule E as Land, and flows to Line 5 of the 1041, Rents, royalties, etc. On the K1's it is not showing up on Line 7 where I would expect it as net real estate income, but is on Line 5 as non passive other portfolio and nonbusiness income. I must be missing something, but I don't know what?
