topic 1041 Estate TurboTax calculation in Get your taxes done using TurboTax

1041 Estate TurboTax calculation

starpal — Tue, 24 Feb 2026 07:01:16 GMT

Re: 1041 Estate TurboTax calculation

starpal — Sat, 01 Jul 2023 12:30:38 GMT

I am filing 1041 for an estate with the only income being a gain between the appraised value on the date of death and the actual sale price, let's say it was $1000. I have adjusted the gain to reflect the closing costs, let's say $100, ($900 total income) and taken allowable deductions, let's say another $100 ($800 taxable income).

I entered 2 distributions of $450 each, and TurboTax generated K-1s for those distributions as net long term cap gains. Schedule B shows total income of $800, and the gain from page 1 line 4 as a negative number, $-900.

However, TT reports the distributable net income as $0 on Schedule B, and calculated tax due on $800 income, while still showing a K-1 distributions. I don't understand what is happening here. I expected to have $0 taxable income and the gain would transfer to the K-1 recipients who would pay the tax.

Is this a TT Support issue or am I missing something? Thanks very much for any guidance!

Re: 1041 Estate TurboTax calculation

dmertz — Sat, 01 Jul 2023 13:57:24 GMT

You must go to Income -> Investment Income -> Allocation of Capital Gains (Loss) and allocate the capital gain to beneficiaries, otherwise TurboTax will not treat it as distributable.

Re: 1041 Estate TurboTax calculation

starpal — Sat, 01 Jul 2023 14:39:42 GMT

Got it, thank you for clarifying for me!

Re: 1041 Estate TurboTax calculation

Anonymous_ — Sun, 22 Dec 2024 21:10:15 GMT

Re: 1041 Estate TurboTax calculation

dmertz — Sat, 01 Jul 2023 15:58:33 GMT

@Anonymous_ , any idea why by default TurboTax treats the capital gains as allocable to the estate? I can see where it might be advantageous to do so if a beneficiary is taxed at a higher LTCG rate than the estate.

Re: 1041 Estate TurboTax calculation

Anonymous_ — Sun, 22 Dec 2024 21:10:27 GMT