Distribution reporting

[andrethetaxman]

Processing an estate's non-final 1041 for 2024.

How do I get Turbotax interview to reflect that:

a) I did not have the estate distribute any of its income. Cash from estate income was retained. The intent was to have the estate pay the tax on its income from remaining corpus cash.

b) Some cash from corpus was distributed. Since it was not estate income, does it need to be reported on 1041 and/or K1's?

c) In-kind distributions of stock were made. Again, since it was not estate income, does it need to be reported on 1041 and/or K1's?

Thanks

[M-MTax]

You do not have to report in-kind distributions of stock nor distributions of corpus.

If the estate pays any and all tax due on income, then you can distribute cash and property to the beneficiaries tax-free. However, distributions, by default, carry through DNI and would therefore automatically be reported on the K-1s.

I'm not sure how you would rectify that scenario in TurboTax Business other than simply having the estate report the income and simply not indicating there were any distributions.