PatriciaV
Expert Alumni

Business & farm

Separate K-1s are used to facilitate the IRS requirement to attach activity reports for each type of income. 

 

Per the Instructions for Form 1041 Schedule K-1 Boxes 6-8: "The fiduciary will provide you with a separate schedule showing your distributive share of income from each trade or business, net rental real estate, or other rental activity."

 

As long as you inform the trustees that both K-1s are to be included on their tax returns, there should be no effect on their tax situation.

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