I paid the exorbitant licensing fees to Intuit for the estate level TTax software for my late surviving parent along with the associated state additional fee and this is after paying for TTax Deluxe to do my personal taxes. I talked to numerous individuals at the call centers to help me realize this is what I needed to file, a 1041 for the decedent and the resultant K-1s.
I read the IRS instructions for Form 1041, all 53 pages, I read the specific IRS instructions for Schedule K-1 (Form 1041) for a beneficiary filing Form 1040, and IRS Publication 529. I inputted all the data required for my late parent, which included a substantial carry over Form 4952 Investment Interest Expense Deduction. The estate level TTax software created the 1041 and the required K-1s, and the K-1s included Schedule D carry over capital losses to the beneficiary's K1s.
However, there was no investment interest expense deduction carried thru to the beneficiaries via the K-1. No one has yet been able to tell me why. This, despite, IRS Publication 529, Miscellaneous Deductions, page 10, paragraph titled Excess Deductions of an Estate or Trust. "Generally, if an estate or trust has an excess deduction resulting from total deductions being greater than its gross income, in the estate's or trust's last year, a beneficiary can deduct the excess deductions, depending on its character. The excess deductions retain their character as an adjustment to arrive at adjusted gross income on Schedule 1 Form 1040 as a non-miscellaneous itemized deduction reported on Schedule A Form 1040, or as a miscellaneous itemized deduction. For more information on excess deductions of an estate or trust, see the instructions for Schedule K-1 Form 1041 for a beneficiary filing Form 1040 or 1040SR."
The questions for TTax are, why didn't your software carry over my deceased parent's excess investment expense from their Form 4952 to me via the K-1? Has TTax misinterpreted IRS Publication 529 Miscellaneous Deductions as noted above?
