Apologies, I wasn't perfectly clear. I want the depreciation to be taken into account on Pennsylvania RK-1 so it can be deducted. Otherwise, the beneficiary is overpaying for rental income. In your example, suppose the rental income (paid by tenants) was $2000. Deducting $1100 depreciation, I believe box 6 of RK-1 should show $900. In my hypothetical case, box 6 shows $2000. This means the beneficiary is paying taxes on the depreciation (3.07% on $1100) when he shouldn't be.
