Depreciation typically follows rental income and is allocated between the trust and beneficiaries. If the trust and beneficiaries split the income equally, then the depreciation deduction is also split equally.
However, if only one beneficiary is designated to receive all of the rental income, then that beneficiary should also receive the entire depreciation deduction. This scenario can be accomplished in TurboTax Business by manually preparing the K-1s in Forms Mode.
In order to avoid overrides on your K-1s, you have to clear any percentages entered in the program (e.g., 50% to each beneficiary) and also amounts distributed to beneficiaries. You will then be able to enter dollar figures (and codes) directly on your K-1s.
You will be left with an error on the Beneficiary List (List of Beneficiaries) because the total allocation will not be 100% (it will actually equal zero because it will be blank). Since that list is only for your records, you can override the figure at the bottom to equal 100% and the return should then pass the error check and be ready for e-filing.
