Question

1041 Trust LT Capital Gain distributed to beneficiaries - how do I specify in TurboTax Business?

Forum|Forum|4 years ago
March 16, 2022
2 replies
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I'm using desktop TurboTax 2021 Business to file a final 1041 Trust return, and I'm trying to figure out where in the software sections to specify the portion of a Long-Term Capital Loss to be distributed to beneficiaries. There is a section that allows for the specification of a Short-term loss distribution, but I don't see a section to specify a LT loss distribution. So far, I have not been able to get an answer from TurboTax customer support. Is there anyone out there who knows the 1041 filing in TurboTax Business well enough and can point me in the right direction?

TurboTax Business Windows

Z

zmurphy2Author

In the title of my post, I meant to say "LT Capital Loss" not "Gain"

PatriciaV

Employee

Be sure you indicated that this is the final year return for the trust under General Info >> About Your Trust or Estate >> About Your Trust (first question). This triggers the allocation of capital losses to the beneficiaries. You do not need to specifically allocate these losses.

Capital losses are allocated to the entity except in the year the estate or trust terminates. In the final year, any loss that would be carried over to the next year can be distributed to beneficiaries.

Final year capital losses are reported on Schedule K-1 Box 11. Code C is used for short-term capital losses; Code D is for long-term capital losses.

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Z

zmurphy2Author

Much thanks for pointing me in the right direction (after multiple unsuccessful tries of getting answers from the TurboTax folks --- apparently, they don't support TurboTax Business 2021). Your reply was very helpful, and I was able to get these returns file.