Report bug with TurboTax Business 2025: US Govt Interest to CA K-1

primitiveskin · ‎January 31, 2026

I'm preparing final 1041s and 541s for my wife's estate. $785 in ordinary dividends was earned, with all of it being US Government Interest. Since the Estate is not being taxed, K-1s are being generated so that my minor son and I can be responsible for the taxes through our distributions.

TurboTax Business 2025 is using the number -999,999,999,999,999 in the CA Adjustment instead of a more reasonable number to zero out the federally taxable amount of ordinary dividends. Right now, this 15-digit figure can't be manually changed. The CA Franchise Tax Board needs to know that the distributions to my son and I as reported on the K-1s is actually supposed to be CA exempt income.

PatriciaV · ‎February 3, 2026

Did check the box for "A portion of these dividends is US Government interest"? Then enter the full amount on the next page. We're unable to reproduce this experience when the dividends are entered as tax-exempt government interest. The California K-1s report no taxable income.

You may wish to delete the 1099-DIV that you entered before saving the return and exiting TurboTax. This should remove the large number from the California Adjustments. Then restart the program and enter the dividends as US Government interest.

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primitiveskin · ‎February 3, 2026

I spoke with a specialist on the phone yesterday. The actual conflict seemed to be taking a deduction on the 1041 for Tax Preparation of $193. Removing the Tax Prep deduction eliminated the -$999,999,999,999,999 CA adjustment on the K-1. Not exactly an elegant solution, but it's what worked.

I was only looking to file a 1041 because income was over $600. Fortunately, the amounts that I'm dealing with look like the estate won't owe Federal or California taxes, but I still need the K-1s to make sense for my son and I.

Right now, I'm waiting for an update to provide better integration between CA and TurboTax Business 2025 to e-file, because it doesn't seem like the program is asking for payment on the CA e-file yet. Otherwise, I'll try to mail in the 541.