What is the tax impact of form 1041 schedule k1 excess deductions from a trust

[smitty597]

I have a form 1041 schedule K-1 with box 11a showing an excess deduction of $8699.  should this not reduce my tax burden?

[Anonymous_ · Accepted solution]

".... should this not reduce my tax burden?"

Not for 2018 through 2025, at this point.

Amounts entered from Line 11 with an "A" code on your K-1 will only (possibly) affect your state income tax return since miscellaneous itemized deductions are no longer deductible on Schedule A.

The foregoing is in accordance with IRS instructions.

See https://www.irs.gov/publications/p529#en_US_2018_publink10004383

[FormerTaxPro]

Update: IRS Issued proposed regulations in May that now allow deducting excess deductions on termination of an estate or trust (Form 1041 Schedule K-1 Box 11 Code A) by writing-in the deduction on Schedule 1, part II, line 22. Great! Has anybody figured out how to enter it in Turbo Tax?

[Critter-3]

If you use the DOWNLOADED version you can make a direct  line entry in the FORMS mode.

[Anonymous_]

@FormerTaxPro 

This is probably not going to happen in the online versions of TurboTax, but you can accomplish this task by using Forms Mode (in a desktop version), opening the Form 1040 or Form 1040-SR Worksheet, scrolling down and entering the figure in the Other Adjustments to Income Smart Worksheet section (see screenshot).

[FormerTaxPro]

That works. Thanks!

BTW, the IRS instructions are at https://www.irs.gov/forms-pubs/reporting-excess-deductions-on-termination-of-an-estate-or-trust-on-f.... Note that they suggest identifying the expense using the code "ED67(e)"