Estate 1041 Final

[fbrcpa]

I have to prepare a 1041 for an estate. It is the first and final for the estate.
There are 4 individuals as beneficiaries with various % totaling 90% and a Church which is a 10% beneficiary. All of the beneficiaries are residual beneficiaries. There were no specific bequests.

The taxable income is a loss of approximately $15,000.

So, there is no income being passed through, only excess deductions on termination and a capital loss carryover. All distributions have been made.

My understanding is that if there had been income, the church's % of the DNI would be considered a charitable deduction, and the balance of the income would be passed through to the other beneficiaries and the church would not get a K-1.

In my situation, there is no DNI, therefore no charitable contribution to be considered, but what do I do with the excess deductions and capital loss.

I believe the church still does not get a K-1, but how do I allocate the deductions and capital loss? Do I just allocate to the individuals 100% prorata and skip the church, or do I allocate as if the church was getting a K-1, but just not deliver the K-1?

Any help would be appreciated.

[Burke]

It will depend on the wording in the will, but if as you say, there was no separate preceding article in the will designating a contribution, and the church was indeed listed as a specific residual beneficiary along with everyone else, then the K-1's reflect the same individual percentages of the deductions as they would have distributions, even though the church will receive no taxable benefit. You will need to do K-1's for all including the church to submit with the 1041.