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?
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.
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?