Level 1
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Deductions & credits

Background: 

- Using TurboTax Business 2018 for the estate's 1041. 

- The estate sold the inherited primary home real estate for a loss.. i.e. there is no income for the estate to report on the sale.

Question:

- Would the K-1s for each beneficiary need to reflect the distribution of the cash proceeds from the sale of the inherited real estate? 

Assumptions:

- The purpose of the K-1s is to record income that the beneficiaries should include on their tax filings. The purpose is not to record all money transfers from the estate's bank account to the beneficiaries.

- The beneficiaries also do not owe income tax on the estate's sale of the inherited property which resulted in a loss