Ohio IT K1 Form - How is the data entered on the Ohio Return IT 1040

[mikeytax]

I was issued an Ohio IT K1 form for an inheritance that was finalized in 2022. There are only two entries on the form under Part III, Investor's / Beneficiary's Share of Ohio Income, line 2a (-1500) and line 2d (-1500). That is it besides my name and my father's name/estate information. How do I enter the information on lines 2a & 2d on my Ohio IT 1040 form? The only income I have is a pension and social security. There is no business income, etc. Thanks for any help! 

[PatriciaV]

Please clarify if you have completed the Ohio state interview and chose to make adjustments to your federal income.

[mikeytax]

I did complete the Ohio Interview and the adjustment options came up. It pre-populated the Ohio IT BUS form but did not enter any numbers on the form. The Ohio IT K1 form which was given to us by the estate attorney has numbers under Part III of the form for Beneficiary's Share of Ohio income. Line 2a (Pass-Through Entity/trust Income has a negative figure of -1502), and that is totaled up on line 2d as the same -1502.  

My Federal K1 (form 1041) generated a Schedule 'D' form on my Federal return for the Estate Settlement. The Federal K1 form had numbers under Column 11, Final Year Deductions for Line 'A' $502 and for line 'D' $7,307. There were no other entries on the Federal form K1 for the estate. The Federal form Schedule D took the $7,307 as a "net long term loss" under line 15, and in the summary section of the form reduced that number to $1500, which was then entered on Federal form 1040 line 7 as a deduction (Married filing separately reduced the $3,000 to 1500). I'm okay with how this worked but nothing was translated by Turbo Tax to my Ohio IT BUS form. My guess is the -1500 would go under the "line 3" entry of the Ohio BUS form where it asks for Capital Gains or Loses from Federal Schedule D? The Ohio IT BUS form then reduces that number (1500) to zero as the deduction was already accounted for on my Federal AGI 1040 form? 

Big question here is do I have this entered correctly? I put the $1500 calculated on Federal Form Schedule D on the Line 3 of the Ohio IT BUS form and Turbo Tax is telling me there are no errors. My guess is that the rest of the deduction listed on my Federal Form K1 is carry forwarded to subsequent years? However, why does the Ohio K1 form have the different number of $1502 on it as opposed to the numbers on the Federal K1 form? 

In any event, did I do this correctly? I had to go into the forms portion of Turbo Tax to make the line 3 entry on the Ohio BUS form. Turbo Tax is now showing no errors. Help!!!!!!!

[PatriciaV]

It appears you made the necessary entries. Was the final number on the OH return negative? a loss? If so, this may have been limited and the balance carried over to future years. Only the allowed loss would be reflected on your current year return.

The difference between the federal and state calculations may be due to rounding. But if the number is not black (calculated), you may wish to review your entries in case this is a typo.

[mikeytax]

And yes, the Ohio figure was 'zero'. The Line 3 entry on  the Ohio BUS form DID NOT translate into a further reduction on my Ohio taxes, and frankly, that was what I expected. I still can't explain the difference on the numbers between the Ohio K1 and the Federal K1, but ultimately, the difference was $2 (the Federal Schedule D came up with a deduction of $1500 on the Federal 1040 form). In reality, the Federal K1 form gave me a $1500 tax deduction for the current tax year, and there are Carry-Forward Tax Worksheets that show a carry-forward into 2023. The Federal deduction then lowered my AGI that was carried into the Ohio IT-1040, so in effect, my income for Ohio was reduced by $1500. I think the OHIO BUS form was just designed to tax a "Business Profit", not another tax deduction that was already carried forward into my Ohio return. 

In any event, Turbo Tax is still showing an error free Ohio return with the Line 3 entry on the Ohio IT BUS form that came from the Federal Schedule D Form courtesy of the "Federal K1" form. What a tangled mess for someone who takes a standard deduction! Thanks for the help!