Prepaid funeral Grantor Tax Advice letter

Forum|Forum|1 year ago
March 5, 2025
1 reply
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I received a "Grantor Tax Advice Letter" from a prepaid funeral trust service. The letter says that I have to report the income (even though it is trivial). I reported interest and dividend income by creating 1099-INT and 1099-DIV forms. However, the form also reports trivial amounts of both short-term and long-term capital gains. The instructions on the form say "Form 1040 line 7 and Schedule D Line 5 (ST) and Line 12 (LT). When I override these fields I get errors. The lines mention Schedule K-1. I cant find Schedule K-1. Searches come up empty.

Is there a way to enter this information?

TurboTax Home & Biz Windows

RobertB4444

The letter for the grantor trust should have been entered as a K-1. In your federal return in the wages and income section you should scroll down to the section marked "Business Items" and click start next to the option for "Schedules K-1,Q". Then start with a K-1 from a 1041 Trust or Estate. Enter the amounts from the letter into the corresponding boxes and the system will enter them into the return for you where they belong.

Since you have already entered the interest and dividends into the system using the other forms you can either leave them off the K-1 when you do the entries or you can go back and delete those entries and enter them onto the K-1.

@dond3

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