Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
Level 3
posted May 23, 2022 9:22:43 PM

Amending last year’s return while also filing this year’s return

Thanks to all who chimed in on my other post.  I have another question as well, also involving MLPs in trusts.

 

I’m using Turbotax Business to file a fiduciary 1041 trust return as trustee.  This trust is my mother’s, who passed away in 2018.  I made several MLP investments in this trust in 2020.  Consequently, I had various suspended passive activity losses to carry forward into the next tax year, i.e. 2021.  Unfortunately, 2020 was also my first year using Turbotax Business, so I didn’t realize I needed to check the box that says “Section B1 (Qualified Business Income Deduction)” to have it actually enter the QBI suspended passive activity loss carryforwards in the appropriate fields in Section A.  I belatedly realized my mistake while doing 2021’s taxes, finding nothing there where these should have been.

 

Naturally, I’d like to fix this.  I assume I'll need to amend my 2020 return and include those carryforwards so I don't lose them.  My question is, how should I handle 2021’s return in light of that?  For now, I’ve filed for an extension.  But can I go ahead and file the 1041 return for 2021 with the suspended losses from 2020 already carried forward, pursuant to the amended return I also intend to file?  Or, should I wait for that amended return to be accepted first before filing 2021’s return?

 

On a related note, Turbotax says the amended return can’t be e-filed, so what should I do?  Where do I attach the required explanation statement to a paper return?

 

Thanks for any advice.

0 6 1664
6 Replies
Level 15
May 24, 2022 7:20:18 AM

Amend the 2020 return first so you have the carryforward correct on the 2021 return.   

 

The 2021 return can be filed before the 2020 amendment has been filed/processed. 

 

Paper file the amended return as it cannot be efiled thru the TT system. 

Level 3
May 26, 2022 6:10:53 PM

Thanks.  Do I need to include any instructions for the additional refund that will be due, since the QBI will reduce the tax liability?  Such as Form 8888?

Level 15
May 26, 2022 6:12:45 PM

Sorry ... the ONLY way to get a refund on an amended return is one single check mailed to the address on the 1041X.  

Level 3
May 30, 2022 5:19:57 PM

Thanks.  So do I need to include a 1040X, even though this is a 1041 return?  I would assume that makes it not applicable.  I should be due back about $180, so what are my options for that?  Also, the IRS instructions say to include an attached sheet listing the lines with figures that changed.  But that would be about half of the figures on the return, so that seems a little excessive.  What about just highlighting the amounts that are different on the return itself, and making a note of it in a cover letter?

Level 15
May 30, 2022 5:22:17 PM

Sorry ... I meant the 1041X not a 1040X.   Of course there really is no 1041X ... it is a 1041 with the amended box checked ...  

Level 15
May 30, 2022 5:22:30 PM

@Critter-3 OP needs to amend Form 1041, not 1040.