K1 Box 14 Code H Section 1411 Adjustment Problem

[suziiii]

I inherited from my mother's estate, and have worked with corporate K1's before so I understand the amount on Line 5 is totally taxable.  Problem is, in Box 14 Code H, the accountant clearly shows a beneficiary PORTION as 1/4 of the amount that was reported on Line 5.  There are 4 of us beneficiaries, and to me it looks like I'm paying the full amount as reported on Line 5, yet calculations and term "beneficiary PORTION" is exactly 1/4th of the amount shown on Line 5 that I am to be taxed.  We are not exempt; taxable for the full amount on Line 5, so the tax liability jumps me up 2 tax brackets so it is a significant problem if they have incorrectly reported my Line 5 based on what they show in the Section 1411 adjustment - by $30,000 more taxes I'll have to pay on that money vs I've already prepaid estimated taxes so I'd have zero taxes due! It's a BIG DEAL for me as I'm unable to work and could really use tha $30,000 to pay the bills. (Line 5 shows $85994 yet Box 14H shows my share as $24,054 (less dividends of $806 reported elsewhere which I don't contest as that is 1/4th of the whole in their summary).  I have no accounting at all from the Trustees and their accountant, and they are abusive and refuse to answer my repeated requests for clarification, information, or a correction.  I have talked to two local accountants who believe my Line 5, based on the negative $62,746 shown as a negative in Box 14H should only by the 1/4 amount.  Is there a "workaround" to adjust Line 5 without them issuing a new K1 which they refuse to do or discuss, or when they write "beneficiary PORTION" is that not really a portion?  Or, does it look like I'm being forced to pay taxes for all 4 beneficiaries?  Help!

[RobertB4444]

Box 5 is indeed all the income that is from sources that aren't standard investments.  This is what the K1 is saying your share of the income is.  Box 14H is actually an adjustment to your investment income - it has nothing to do with the other beneficiaries' shares.  It can be an increase or decrease to the investment income.

You should be able to tell whether you received more than the amount in box 5 from the estate.  If they haven't paid you more than that amount then you shouldn't enter it on your tax return.  If you have received more than that amount then that answers the question.  

Still, you are entitled to understand your inheritance.  Contacting accountants by email is easier this time of year than telephone.  

@suziiii 

[suziiii]

Thanks for your reply.  I did receive more than the Line 5 reported amount.  That's not the issue.  The issue is in 14H and I'll type it exactly here:  Net Investment Income:  X (then defines different types), then Total Net Investment Income at the bottom which is the total X.  BENEFICIARY PORTION OF INVESTMENT INCOME 1/4 of the next line which is INCOME REPORTED ON SCHEUDLE K-1.  The numbers for dividends and deductions are CLEARLY 1/4 of the whole as reported on the first Line Net Investment Income, yet the numbers clearly state that my PORTION is exactly 1/4 of what is reported on Line 5.  I've had 4 professionals look at this, and they are in agreement that it appears the amount this Trustee's accountant has put down is the full amount for all 4 beneficiaries, and that 14H shows what MY PORTION is supposed to be.  All the other numbers shown on the K1 are only 1/4 of the whole; yet the taxable Line 5 amount is the TOTAL as they themselves have written.  This Trustee has .. me on multiple issues and absolutely refuses to respond or answer questions.  They are combative and belligerent and I have sent multiple letters they have signed for asking clarification.  14H shows a negative number which makes the correction, and 14E shows the correct amount for my PORTION.  It even says in the notes "PORTION".  I can't afford an attorney; already wasted $15,000 just to try to get answers through one and the attorney did nothing at all.  I've tried 3 attorneys and all the same; just take money I don't have and do nothing and all I'm trying to do is get questions answered.  I know I have to report and pay taxes on Line 5.  I  know all about K1's and taxes.  What I don't know is why they would put in 14H that my portion is only 1/4 of what they put as my share.  I never got accounting to show where the numbers come from either, and I asked to see the documents sent to my brothers and sisters (the other 3 beneficiaries), but they told me due to "privacy" I'm not allowed to know what amount the other beneficiaries are being taxed on which would resolve this.  I think that's illegal; beneficiaries have the right to know disbursements, but I have no recourse.  Thanks for whatever you can decipher from this mess.

[RobertB4444]

This is a lot.  But I will tell you that the first piece of advice I have for you is that you should not use TurboTax to prepare your taxes this year.  You should hire a tax professional.  Your tax stuff is complicated this year. and you should have another set of eyes looking at it.  

Next, you don't have just a tax problem, you have a legal problem and we're not going to be able to help you here.  You need legal representation that you can trust and you need it now.  

Good luck.

@suziiii