topic K-1 Trust Interest in Deductions & credits

K-1 Trust Interest

Lawrence333 — Mon, 09 Mar 2026 06:10:40 GMT

Re: K-1 Trust Interest

FangxiaL — Sun, 13 Feb 2022 21:05:02 GMT

Please clarify: how can I help you with K-1 Trust Interest?

Re: K-1 Trust Interest

Anonymous_ — Sun, 13 Feb 2022 21:07:21 GMT

See K-1 Form (intuit.com)

Re: K-1 Trust Interest

Lawrence333 — Sun, 13 Feb 2022 21:44:31 GMT

Entered into TT in response to question-Did you receive a K-1? I did and had to enter the following-Box 14 and then Code E (net investment income) which carries over to K-1 Worksheet but not in the Passive Income Area which would carry over to Schedule E. There is note on the K-1 Worksheet that cautions IRS compares K-1 you receive with Schedule E.

Re: K-1 Trust Interest

Anonymous_ — Sun, 13 Feb 2022 21:45:51 GMT

Please see the other thread you posted.

Re: K-1 Trust Interest

FangxiaL — Sun, 13 Feb 2022 21:48:26 GMT

Per 2021 IRS Instructions for Schedule K-1 (Form 1041) for a Beneficiary Filing Form 1040 or 1040-SR:

Box 1 -- Interest Income

This box reports the beneficiary's share of the taxable interest income. This amount is reported on line 2b of Form 1040 or 1040-SR and Schedule B, Part I, line 1, if applicable.

To enter your K-1 from the Trust, follow these steps:

Open or continue with your return
Click on Show more next to S-corps, Partnerships, and Trusts under the Income & Expenses section
Click on Start or Revisit next to Schedule K-1
On the next screen Tell Us About Your Schedule K-1, click on Start or Update next to Estates or trusts (Form 1041)
Answer the questions on the screens that follow
Select No if not trust - Final K-1
Enter Interest in Box 1
Done

You should see $0.00 next to Schedule K-1 on Your income and expenses screen.

To view if the K-1 interest income is on line 2b of Form 1040:

Go to Tax Tools > Tools to open the Tools Center
Click on View Tax Summary, click on Preview my 1040

Line 2b taxable interest should include the interest income from your Schedule K-1 received from the trust.

@Lawrence333

@Anonymous_

Re: K-1 Trust Interest

Lawrence333 — Sun, 13 Feb 2022 22:49:18 GMT

The only amount on line 2B is the total amount of interest earned on bank accounts (1099-INT Form). The interest earned from trust does not transfer-I strongly believe it belongs on Schedule E based on K-1 worksheet generated by TT. The three individuals all agreed that the approach is right but the amount is not showing up. If I use Code H instead of Code E I can manually enter on Worksheet and it will carry to Schedule E. This entry turns red instead of blue and I was told that you can't E-file if it is red.

Re: K-1 Trust Interest

Anonymous_ — Sun, 13 Feb 2022 23:11:01 GMT

Are you referring to Part III of Schedule E?

Interest income does not appear in either the passive or nonpassive side.

Income from rental real estate, for example, would appear on the passive side.