1041 Schedule G for Estate

[keyvie]

@M-MTax-Sorry I have been busy with other stuff and I am looking at the taxes again.  What I don't understand is why there is a tax amount we owe because there should not be with the estate filing.  The whole AMT thing is confusing as well.  Why is there something in that field even? The amount is less than $28,400.  Do I just not worry about it? I am beginning to think Turbo Tax Business is not that great of a software! 

[NCperson]

@keyvie it's not necessarily the software that is the issue, it's that estate and trust tax returns are a 'whole different animal' than a personal tax return and takes a 'learning curve' to understand what needs to be done.  That is why I suggested hiring someone to do this for you - that way you know it is accurate and the other beneficiary (your sibling?) is confident it is correct.  Because you will giving them a K-1, you are playing with the accuracy of THEIR tax return if you do this incorrectly.   That could impact your relationship once this is finally completed (and if you do it wrong, there will probably be an  argument to go to a professional in any event!)

The estate did not distribute all the income - there is taxable income on Line 24 of $4721 and the tax is $727. 

Most times, the dividends and interest are distributed to the beneficiaries, but the capital gains is held and not distributed, which creates the tax.  that is why you were asked earlier if there were any capital gains. What is on Line 4?

Look at Schedule I and line 27 - it specifically states to STOP if this line is less than $28,400 as there is no AMT. But the form has to be populated to know the STOP on line 27. 

Also, what is displayed on Line 10 of Sch B - it should the actual cash money that went to the two of you.  see, this is complicated 😉

[keyvie]

@NCperson -LOL, yes I was trying to hire someone but all the CPA's I talked to early on said sure no problem we can help you with this and when I was ready each one of them flaked on me so then I was stuck with what do I do? So I decided to buy the software and do it myself.  Well so here I am the CPA, executor and financial advisor by not my choice but I am glad there are people like you in the community that can help! Thank you in advance....

On line 4 of the 1041 shows 0.  Regarding Schedule G line 1c it already has 0 listed.  So now I am confused on this.  There is no capital gain or dividends that I know of.  Still confused.......Thanks

[keyvie]

@NCperson -sorry I forgot to mentioned that Schedule B line 10shows 0.  Where do I put in the amount?

[NCperson]

@keyvie sorry - but I am going to bow out.  You have so many questions and such a novice at this (because the 1041 is so different!) that this just isn't an effective way to complete the estate tax return.

for the sake of the other beneficiary, find some one to do this for the two of you!  otherwise, the risk is a) it is done incorrectly, b) takes hours of your time needlessly and c) creates bad blood with the other beneficiary.  

[keyvie]

@NCperson -Thanks for trying to help.  I appreciate the info.  If anyone is willing to work with me to help get this figured out I would appreciate  and welcome it.  Sorry for all the questions. 

[M-MTax]

If anyone is willing to work with me to help get this figured out I would appreciate  and welcome it.  

I'll try but you need to understand that the AMT does not apply to you and your lines 17 and 18 should match if you're distributing all of the income from the estate......and it looks like those lines are different.

     You need to distribute ALL of the amount on line 17 or the estate is going to get taxed on the difference.

[M-MTax]

@keyvie Look at line 17 and distribute the entire amount to the beneficiaries. What happens?

[M-MTax]

Why is there something in that field even? The amount is less than $28,400.  Do I just not worry about it?

You just don't worry about it. The software must generate that form somehow if there is tax due no matter what and even if it's not necessary.

[keyvie]

@M-MTax-the money has been distributed equally in the K-1's.  It still shows we owe taxes.  I was thinking about starting over and redoing it.  Maybe I missed something and if I start from scratch that might help.  

[M-MTax]

It still shows we owe taxes.

     OK, that means you did NOT distribute ALL of the income. You clearly missed something. Line 17 is your guide.....make sure you distribute all of it.

     You said Line 17 was 37,696 so make sure that's the total of how much you distribute.

     And go back through the distributions section of TT and make sure the total of all of the distributions equals that Line 17 amount. With 2 beneficiaries that's $18,848 each. 

[keyvie]

@M-MTax-I have checked it over and over and line 17 totals what the K-1's show.  Is there anywhere else? 

[M-MTax]

@keyvie First of all, what type of income is this.....interest? You said there were no capital gains, right? If there are capital gains you need to use a procedure for that. 

     Then, what lines on your K-1s have numbers and what are those numbers. You need to understand that I want to help you BUT we're flying blind here........need more info including what figures you entered and where. Like your distributions section should add up to Line 17.

[keyvie]

-first of all, Thank you.  I know I have asked so many questions and I appreciate all your help. 

First of all, what type of income is this.....interest? You said there were no capital gains, right? If there are capital gains you need to use a procedure for that. 

-This is rental income and not interest or capital gains.  

Then, what lines on your K-1s have numbers and what are those numbers. You need to understand that I want to help you BUT we're flying blind here........need more info including what figures you entered and where. Like your distributions section should add up to Line 17.

-On line 7 of both K-1's the amount shows 18,848 and line 9a shows 6,999.  

On the 1041 line 5 shows 44,396 (This is the amount of the rental income). 

These are things I have entered into TT.  Does any of this help?

[keyvie]

@M-MTax -The rental income was entered under the Schedule E that was created in TT.  I forgot to answer this part.