Question

Strange Situation when entering interest income and dividends on 1041

Forum|Forum|1 year ago
February 8, 2025
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Using the 1041 tax software the interest income and dividends were equally being split up among the 3 K-1’s for the Beneficiaries. However when I entered property taxes of $4,200 on the 1041 it now looks like the program is calculating Alternate Minimum Tax based upon the codes on line 12 of the K-1’s and the Interest and Dividends are now slightly less on the K-1’s then before I entered the property tax. Can anyone make sense of why? Thanks!

T

trust812Author

I think I answered my own question how it’s happening but I am not sure tax wise why. After I entered the property tax deduction of $4,200 on 1041 the software in Part II of form 8960 “Investment Expenses Allocable to Investment Income and Modifications” modified the Interest Income and Dividends slightly lower. Is there any tax explanation for this? Thanks!