New trust client receives a K-1 from a separate trust with Final year deductions

Forum|Forum|6 years ago
May 1, 2020
1 reply
25 views

So we have found a spot for everything that the trust received through a K-1 of another trust. All except for the items in Box 11 B&C (Final year deductions for short and long term loss carryovers). My research skills have been exhausted and I need help!

When I put these items in the passive loss carryover section of the Passthrough K-1 screen they are not included in the Accounting Income on Schedule B of the 1041. If I include them on the Schedule D, they come through in Accounting Income.

Does anyone know the answer? The software is usually correct, but I believe these Final Year Deductions should be included in Accounting Income.

ProConnect Tax Online

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sjrcpa

Level 15

Capital losses and gains are corpus.

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

M

mattgutzAuthor

Level 4

Thanks sjrcpa

I must be missing something. The capital gains/losses that I input from a 1099-B are being reported as Accounting Income and the Final year deductions for passive loss carryovers are not.

B

Barky

Level 2

mattgutz, hi, I saw your question and thought I would comment as I have read a lot on NOL and Capital Loss carry forwards in the Final Year. The instructions for the K-1 entries are specific to where they go on a form 1040. Individual Beneficiaries. Since Trusts are treated as a Separate Entity I'm not sure you can take the loss on another Trust return. I think it will require a little more research regarding Abusive Trusts and maybe Related taxpayer issues? Good luck with that one!

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