1041 Final - k1

[thetaxman2200]

If I am correct. When the Final 1041 is filed - the cash distributions to the Beneficiaries does not need to be reported on the final K-1, is that correct? Do I need to report that anywhere?

Thanks

Still learning

[appelman]

Is this an estate or a trust?

Distribution of income, if there is any, must be reported on a K1.

[thetaxman2200]

Final K-1

We had a cap loss on the house, and the attorney fees where reported on the K-1. There was about 20k of cash left over after every bill was paid. The 20k was then distributed to the beneficiaries, I could not find where I had to report it or where.

[DaveO]

Income and Loss is reported. Cash distributions are not.

[Burke]

The distributions are reported on Page 2 of the 1041 under the section for Distributable Net Income (DNI). Whether or not they (or any part of this amt) flow(s) thru to the K-1's as taxable, depends on whether there is taxable net income from the estate/trust on Page 1.

[appelman]

To the best of my knowledge...

Distributions of corpus do not go into DNI.

[appelman]

Further comment

IF this is a trust, and IF the house can be considered investment property in the hands of the trust, then the capital loss is also passed on to the beneficiaries on the K-1.

[thetaxman2200]

So if the the monies are just left over cash - nothing needs to be reported. If cash was in the process of income/loss then this is reported. Correct.

Thanks

[Burke]

I stand by my previous answer. A good reference on computing DNI is available at https://www.aicpa.org/InterestAreas/...ustEstates.pdf by Jacqueline Patterson, Atty. See pages 108-6 - 8. It also includes an explanation of how DNI came about.

"Generally, the deduction for distributions to beneficiaries is the lesser of:

a. The total amount of distributions made, OR required to be made to the beneficiaries; or
b. The DNI of the trust or estate.

[dsi]

How did the cash get into the trust? Was it "income"? That is, proceeds from the sale of property? Interest/Dividend Income?