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theshark32
Returning Member

Estate form 1041: Do I enter the cash distributed to beneficiaries on the 1041 even if the estate has a net operating loss carryover?

My brother passed away and was renting his home.  After the tenant's lease expired, we sold the home.  The estate final tax return (1041) has a net operating loss carryover that is passed to the beneficiaries on line 11D of the k-1.   

The house sale obviously generated cash.  Therefore, I distributed the cash to the beneficiaries.  Where should the cash distribution go on the estate's tax return? Or does it, as there is a net operating loss carryover?  

1 Best answer

Accepted Solutions
tagteam
Level 15

Estate form 1041: Do I enter the cash distributed to beneficiaries on the 1041 even if the estate has a net operating loss carryover?

Yes, you do not have to enter distributions of corpus.

View solution in original post

3 Replies
tagteam
Level 15

Estate form 1041: Do I enter the cash distributed to beneficiaries on the 1041 even if the estate has a net operating loss carryover?

It appears as if you actually distributed corpus (trust principal) and that does not need to be entered on K-1s, but the total amount can be entered as a tier 2 distribution.

theshark32
Returning Member

Estate form 1041: Do I enter the cash distributed to beneficiaries on the 1041 even if the estate has a net operating loss carryover?

You said that the distribution "can" be entered as a tier 2 distribution.  Does that mean I don't have to enter it on the 1041 tax return?  If I "have" to enter it, where does it go?

tagteam
Level 15

Estate form 1041: Do I enter the cash distributed to beneficiaries on the 1041 even if the estate has a net operating loss carryover?

Yes, you do not have to enter distributions of corpus.

View solution in original post

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