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Level 4
posted Feb 9, 2025 5:11:08 PM

Do these 2 codes on the 1041 K-1 make sense?

After entering K-1 information into the software for the Trust 1041 it populates line 12 of the K-1 with codes A and J. Have any of you ever seen those codes generated with TurboTax? Why are they generated when the AMT is 0 from Form I (Alternate Minimum Tax for Estates and Trusts)? When I enter the K-1 information into the 1040 FreeTaxUSA software it ignores the 2 Line 12 A and J codes and seems to only use what is in Line 5 on the K-1 with no errors generated. FreeTaxUSA.com is one of the IRS’s recommended free tax software partners. I used it last year to file my 1040 and it worked great.
 
2024 Schedule K-1 (Form 1041)
 
Line 12 - Alternative Minimum Tax Items
 
Code A - Adjustment for minimum tax purposes: 
 
$1,377
 
Code J- Exclusion items: 
 
$1,377

0 3 1970
3 Replies
Expert Alumni
Feb 9, 2025 5:37:32 PM

Unless you have some unusual tax transactions such as exercising and holding Incentive Stock Options, or a very large amount of income from muni-bonds, you don't need to worry about the AMT adjustments.  If you had an AMT situation those items would show up on Form 6251 Alternative Minimum Tax - Individuals.  It is highly unlikely you have an AMT situation.  

Level 4
Feb 9, 2025 6:12:31 PM

OK, thanks! Good to know. I am just picayune and  like to understand  what things mean and was wondering if anybody ever saw such codes on Line 12. Basically what I have is very simple: money from an inherited IRA (from 1099-R) on line 5 of the K-1 and deductions on the Trust 1041 for  the lawyer, accountant, fiduciary, and home property taxes. That’s it and the line 12 codes A and J were generated on the K-1 buy the AMT on the 1041 schedule I was 0.

Level 4
Feb 9, 2025 6:25:09 PM

I can imagine if this was a bug in the software it would be fixed by now because my 1041 Trust is so simple and straightforward that many people would have experienced it by now.