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RRArtie
Level 2

1041-es calculation doesn't account for capital gains

When will the calculation for 2018 estimated tax on form 1041-es be fixed to account for capital gains tax rates?

I have a trust with dividends and capital gains (sales and distributions) income. Turbo Tax Business carries all of 2017 income into the 2018 1041-es entry. Only the capital gains from 2017 sales are entered as capital gains estimates for 2018. I correct these estimates add the appropriate distribution deduction and look at the calculated tax. Turbo Tax Business doesn't use the Tax Computation Worksheet Using Capital Gains Rates and calculates a tax double what I will owe. Useless! I will continue with my spreadsheet method. 

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tagteam
Level 15

1041-es calculation doesn't account for capital gains

" I will continue with my spreadsheet method."

That would probably be the best approach and I believe you have a legitimate gripe about how the estimated tax is calculated. 

It appears as if the program simply uses the tax rate table exclusively and I presume that is because of the compressed tax rates for estates/trusts. Regardless, cap gains rates calculations should at least be a selectable option.

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3 Replies
tagteam
Level 15

1041-es calculation doesn't account for capital gains

" I will continue with my spreadsheet method."

That would probably be the best approach and I believe you have a legitimate gripe about how the estimated tax is calculated. 

It appears as if the program simply uses the tax rate table exclusively and I presume that is because of the compressed tax rates for estates/trusts. Regardless, cap gains rates calculations should at least be a selectable option.

View solution in original post

RRArtie
Level 2

1041-es calculation doesn't account for capital gains

Thank you for the quick response. I had hoped Turbo Tax developers would "say we are working on a fix", but the new tax law probably gave them a bunch to do for 2018.
For people that rely on this calculation (in other words don't run a parallel spread sheet) it is very misleading. As you say the brackets are compressed and you get to the max fast. However, you should be paying only 15% for the cap gains.  Again, thank you
hpeelle
New Member

1041-es calculation doesn't account for capital gains

I bought Turbo Tax Business specifically to help me calculate 2018 estimated taxes for at trust using 1041ES-2018. However, since all of the trust income are qualified dividends and capital gains, the program is not useful at all. I will have to do this manually. I would not recommend the purchase Turbo Tax Business for those wishing to calculate  Estimated Taxes for a Trust
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