Do I need to issue a K-1 Form?

[buddydaddy0]

I am filing a final 1041 for my mother-in-law's trust as my wife is the executor/trustee.  My wife, her brother and sister all shared in a distribution from the sale of my mother-in-law's home.  Is there a need for me to issue a K-1 for the wife, brother and sister?  I actually saw the form letter and K-1 in TurboTax Business but it did not have the amount of the distribution they all shared.  Am I missing something here?

[Anonymous · Accepted solution]

for trusts and estates the distributions are not what is taxable its the income reported on K-1s.  in the final year for an estate all income and unused losses are passed out to the beneficiaries as reported on the K-1's.

say estate received $5,000 in interest income but there was bond premium amortization of $200.  the $5,000 was distributed to the beneficiaries.   but only $4,800 would appear on K-1's and that's what is taxable

or say on final return a house with an estate value  of $100,000 is sold for $110,000.  the $110,00 goes out to the beneficiaries     but only the $10,000 in capital gains would be taxable to them.  

[Critter]

If you are filing a 1041 for the estate and there are beneficiaries then the K-1 forms should be completed and issued if there is income or deductions to pass thru otherwise the estate pays the taxes at a much higher rate and they lose the deductions. 

[kshrah]

what Turbo tax product should I use to prepare the K1 ?

[VolvoGirl]

You need to prepare a K-1?  For what kind of return?  

You need Turbo Tax Business.
TT Business is for 1120 Corporation, 1120S Corp, 1065 Partnership or 1041 Estate/Trust returns and will not do your personal 1040 return. It is a separate program from the Desktop Home & Business program or the Online Self Employed version.

Home & Business (or Self Employed) is for personal returns that include a schedule C for self employment or sole proprietor. A single owner LLC would be reported on Schedule C unless the LLC elected to be treated as an S corp or C corp.

You will get a schedule K-1 (or a W2) from the business return to manually enter into your personal 1040 return.

Turbo Tax Business is not available to do online or on a Mac. You can buy the Window's (Win 7 or newer) version here. And you can have both TT Business and TT Home & Business (or any personal version) installed on your computer at the same time.
https://turbotax.intuit.com/small-business-taxes