Reporting capital loss to beneficiaries on final 1041

Forum|Forum|4 years ago
January 9, 2022
2 replies
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What line on the Trust 1041 do I report a capital loss carry forward to beneficiaries in the final year of the Trust. I know where it goes on the K-1's sent to beneficiaries but where does it go on the Trust's 1041?

Best answer by M-MTax

on the final return it doesn't go anywhere on the 1041.....just gets reported on SCH D and the K-1.

M-MTaxAnswer

Level 15

on the final return it doesn't go anywhere on the 1041.....just gets reported on SCH D and the K-1.

DianeW777

Level 15

The Schedule D as indicated, is the appropriate form to enter the capital loss carry forward, however on the Form 1041 you will be using the 'Distributable Net Income' section to reduce or eliminate the income from the estate income. Then it is passed onto the beneficiaries on the K-1s.

Distributable net income (DNI). The income distribution deduction allowable to estates and trusts for amounts paid, credited, or required to be distributed to beneficiaries is limited to DNI. This amount, which is figured on Schedule B, line 7, is also used to determine how much of an amount paid, credited, or required to be distributed to a beneficiary will be includible in his or her gross income.
Instructions for Form 1041 2021

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