I'm filing a 1041 for the first time for a trust with a sole beneficiary where all of the income is being distributed. Beneficiary and trust are Illinois residents/domicile. The trust has passive income - mutual funds, ETFs - invested solely for the benefit of providing the beneficiary income and asset growth. Turbotax Business is placing this income in Business Income Step 4, not Nonbusiness Income Step 3. Not sure if this is correct - may be correct if the trust investment operations is considered it's "business". Can someone advise if Turbotax Business is placing this income in the correct section, and if there's a step by step question I missed, or answered incorrectly? It should be noted that I don't think this seems to be affecting the beneficiary's personal taxes as the K-1 seems not to differentiate between business vs. non-business.
