Question

Trust (1041) K1 does not include 199A dividends (from REIT held by Trust)

Forum|Forum|6 years ago
February 20, 2020
3 replies
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My father's trust holds mutual funds that have REIT holdings. On the trust's 1099-DIV there is ~$850 in box 5 (Section 199A dividends), which I presume is REIT dividends. I have filled out TT business (including putting the ~850 in box 5 under the 1099-DIV section), but in the K1 worksheet (Amounts to Allocate to Schedule K-1 Worksheet) there is nothing listed in 14-I. I would have expected some of the REIT dividends to flow there. FYI, I do not expect the full amount to flow there as the trust did not distribute all accounting income (the trust paid taxes on a property, which reduced it's income, and it had capital loss carryover). As a comparison the foreign tax paid on the K1 is about 92% o that listed on the trusts 1099-DIV box 7 (Foreign Tax Paid).

That leads into a second question. I can use a 663(b) election to distribute the full accounting income, but by distributing slightly less the trust still owes no tax and the beneficiary has less dividend income to owe tax on. Am I required to distribute the full accounting income? In the trust documents the trustee is required to distribute the "net income" of the trust.

Thanks!

TurboTax Business Windows

A

Anonymous_

Employee

If the trust requires the trustee to distribute net income, then the return should reflect that the distribution was made whether the distribution was actually made or not (i.e., whether the beneficiaries received the funds or not they are liable for any tax due).

P

PepeprwnAuthor

Is distributing enough from the trust to get to a taxable income of $0 equal to "distributing all net income"?

A

Anonymous_

Employee

Yes, that would be all net income if the taxable income is zero.

DavidS127

When I started a Form 1041 trust return in TurboTax Business on 3/13/2020, the Section 199A dividends I reported from a Form 1099-DIV "flowed" to the K-1 (Line 14 reported an "I" code and "STMT"), the Statement A, and the 199A Statement A Summary.

Check for updates to your TurboTax Business (menu at top, Online>>Check for Updates) and your issue with Form 1041 Section 199A dividends should now report properly on Statement A of the K-1.

@Pepeprwn

@kl51

@pleasepaytheman

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DavidS127

When I started a Form 1041 trust return in TurboTax Business on 3/13/2020, the Section 199A dividends I reported from a Form 1099-DIV "flowed" to the K-1 (Line 14 reported an "I" code and "STMT"), the Statement A, and the 199A Statement A Summary.

Check for updates to your TurboTax Business (menu at top, Online>>Check for Updates) and your issue with Form 1041 Section 199A dividends should now report properly on Statement A of the K-1.

The issue for TurboTax Online and Download/CD users with REIT dividends for a recipient of a trust Form 1041 K-1 has also been resolved by recent updates.

@Pepeprwn

@RRArtie

@rvhageman

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R

RRArtie

Employee

Just went into TT Business and ran through the entries to make sure it recalculated and the K1 line 14 does have a statement and the statement has the 199A dividend. Great! Thank you to all for the fix. Now to finalize the 1041 and enter the K-1 numbers on my 1040.