As an executor of an Estate I need to fill out K-1 forms for beneficiaries were interest is the only distribution.

Forum|Forum|3 years ago
March 26, 2023
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Mom died in late Sept 2022. Accounts were closed and amounts given to beneficiaries in November. All interest was reported on my Mom's 1099-int forms. I was able to reduce the interest the Estate needs to take by using negative amounts when entering adjusted interest in the 1041. So of this adjusted interest need to be on the k-1 forms of the beneficiaries that got the interest when closing the account. How does the creating the K-1s get done based on the amount you distributed to beneficiaries? It seems random. I add a lump sum and it does not ask you what king of income it was? How would you handle this situation with Turbo Tax Business?

TurboTax Business Windows

Best answer by Anonymous_

I am very sorry for your loss.

If the 1099-INTs were issued in your mother's name for the 2022 tax year, then she received part of that interest as nominee.

As a result, on her final return you would report the entire amount of interest reported on the 1099-INTs and then subtract the amount she received as nominee for the estate.

On the 1041, the interest income will appear on the K-1s to the extent you make a distribution to the beneficiaries.

Anonymous_Answer

Employee

I am very sorry for your loss.

If the 1099-INTs were issued in your mother's name for the 2022 tax year, then she received part of that interest as nominee.

As a result, on her final return you would report the entire amount of interest reported on the 1099-INTs and then subtract the amount she received as nominee for the estate.

On the 1041, the interest income will appear on the K-1s to the extent you make a distribution to the beneficiaries.

pokidotAuthor

As a follow up I was able to manually put the interest on the K-1 form by saying I didn't distribute anything to beneficiaries for 2022 but that I wanted K-1 created. Would I deduct the amount of interest that went to the beneficiaries from the amount of Interest that I reported for the estate? Then I need a detailed explanation to include with the return as well accounting for all the interest from my Mom's 1099-int forms?

Anonymous_

Employee

@pokidot wrote:

Would I deduct the amount of interest that went to the beneficiaries from the amount of Interest that I reported for the estate?

The program does that for you when you make a distribution to the beneficiaries.

If you reported all of the interest on the 1041 and had the estate pay any tax due on that income, then the beneficiaries would not have any tax liability for the income and, absent other income items, there would be no need for K-1s.

Finally, it is completely unclear to me as to how you are proceeding in preparing this return. You should not have to "manually put the interest on the K-1" if you are preparing the 1041 properly using TurboTax Business.