1041

[airplaneb777]

I am in the middle of preparing my first 1041. I have more expenses than income, should my K-1's not have any amounts on them? I only have interest income, but the expenses are far more than the interest, should the interest be allocated to each K-1?

[Burke]

Probably not if taxable income is negative before DNI. No tax is due. Were distributions made? Do you have a figure for DNI? If there is a positive income amount before DNI is calculated, then it will pass thru to the K-1(s) in proportionate shares up to the amount of distributions paid to the beneficiaries. If K-1's are blank, you do not attach to return. If this is a first and final 1041, there may be deductions to pass through.

[airplaneb777]

1041

No distributions were made, and income is negative before DNI. Should the deductions be passed through on the K-1?

Probably not if taxable income is negative before DNI. No tax is due. Were distributions made? Do you have a figure for DNI? If there is a positive income amount before DNI is calculated, then it will pass thru to the K-1(s) in proportionate shares up to the amount of distributions paid to the beneficiaries. If K-1's are blank, you do not attach to return. If this is a first and final 1041, there may be deductions to pass through.

[Burke]

Only if it is the final 1041 and the estate is terminated. If you check final, the software should pass through any excess deductions on termination of the estate and any capital losses remaining not used to offset income.