I am preparing a 1041 for a Trust. the trust has oil and gas royalties. it distributes 100% of its income to beneficiaries. I note that the 15% depletion allowance is not shown as a deduction to get to taxable income in the 1041. In the beneficiary K-1's, the income without the depletion deduction is shown on line 5. However, in the K-1, the depletion amount is shown as a directly apportioned deduction on line 9. When the beneficiaries file their Federal 1040's, will line 9 be deducted from line 5?
