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.
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