1041 K-1 section 14 Other Information, Line I

[kwelch0424]

My 1041 K-1 line 14 I asks for additional information related to foreign income in the form of 3 questions: 1) Gross income sourced at the Beneficiary level, 2) Gross income sourced at the Beneficiary level, US Source, 3) Gross income sourced at the Beneficiary level, Foreign Source.

All the information comes from my 1099 and the countries are RIC. I can figure out the gross of the foreign source but not sure what the beneficiary level and beneficiary level, US source means.

Any thoughts?

Thanks

[DaveF1006 · Accepted solution]

The term "beneficiary level" in the context of your 1041 K-1 refers to income that is allocated to you as a beneficiary of the trust or estate. Essentially, it means the portion of income that is distributed to you, rather than retained by the trust or estate.

Here’s a breakdown of the three categories:

1. Gross Income Sourced at the Beneficiary Level: This is the total income allocated to you, regardless of whether it's from U.S. or foreign sources. 
2. Gross Income Sourced at the Beneficiary Level, U.S. Source: This refers to the portion of the income distributed to you that originates from U.S. sources.
3. Gross Income Sourced at the Beneficiary Level, Foreign Source: This is the portion of the income distributed to you that originates from foreign sources.

Since your 1099 provides the details of foreign income, you can use that to determine the foreign source portion. For the U.S. source portion, you would need to identify income that is not foreign—this could include dividends, interest, or other income from U.S.-based entities.

Your K-1 and 1099's come with supplementary disclosure forms.  Look through these forms because they may have important information about income sources at the beneficiary level to report on your return.

[kwelch0424]

Thank you for you detailed and thoughtful response David! That's what I ended up doing is calculating it that way. It was like process of elimination and the numbers fell into place.

[D000D]

This answer was very helpful, but I had to do a little more work to get the number I needed to get the Gross Income Sourced at Beneficiary Level: Foreign Source Income. 

My 1099-DIV showed Total Ordinary Dividends and the Supplemental Information provided with my 1099-DIV showed the Total Foreign Income. The Ordinary Dividends transferred to my Schedule K-1 was less than the Total Ordinary Dividends on my Schedule K-1, however, so I had to prorate the Total Foreign Income as follows:

Total Foreign Income / Total Ordinary Dividends X Ordinary Dividends (on Schedule K-1) = Foreign Source Income at Beneficiary Level.