I am preparing Form 1041 and K-1s for my mother's estate. We sold her home, and the proceeds were distributed to all beneficiaries. These distributions are showing on the K-1's Beneficiary Allocation Smart Worksheet. However, due to stepping up the basis and expenses, we are actually reporting a loss on the sale of the house. So, the K-1's are not showing anything in lines 1-14. Does this sound right, or is something going wrong in TurboTax? Do I still need to distribute the K-1s if there is no income for beneficiaries to record on their 1040s?
