In my research I have found that a non-qualified annuity should be included in net investment income calculations. Does that hold true if the annuity was paid out to beneficiaries through trust? I would think yes, that the taxable amounts that were distributed to the beneficiaries would be included in box 14E of the K1; however my Lacerte program is not carrying over the amount to K1 box 14E. So, is there something I am missing?
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Yes. Not sure how it was input on Form 1041, but it should have been on Line 8, Page 1. Then it carries to the K-1's, Line 5. -
Lacerte handled as you noted - line 8 of 1041 and line 5 of K-1. However, Lacerte is not carrying the figure to box 14E of the K-1 which would carry to the 8960 of the individual return for net investment income. Should it not be considered net investment income to the beneficiary?Comment
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I see what you are saying. What was the code on the 1099-R? If it shows "D" in the distribution code, it is subject to NIIT and goes on Line 3 of 8960. Retirement annuities do not count for NIIT. (IRA's, 401K's, etc, etc.) See page 5 of instructions for 8960 regarding annuities.Last edited by Burke; 03-18-2016, 07:02 PM.Comment
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Thanks, the distribution code shows "4D".
Peggy SiouxComment
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I am really surprised that Lacerte does not automatically apply to box 14E on the K-1. I spoke with a representative at Lacerte and was advised I should just override the program, but for the price of Lacerte, I would think I shouldn't have to override.Comment
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I agree. Software should have handled correctly with 4D input on 1099-R worksheet. Good catch on your part. Did you try this on a 1040 to see if it worked properly on that form?Comment
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