Estate K-1, Box 11B TurboTax Deluxe vs Premier

[DCO1]

I have Desktop Turbotax Deluxe. I received a final Estate K-1 with Box 11B checked and several thousand dollars entered. The fiduciary tells me the amount is related to income generated by the portfolio and is not subject to the 2% limitation. I am itemizing deductions.

TT Deluxe basically forces you to use Override to report these amount on the Misc Dedn worksheet so they will flow into Schedule A, Line 16. It then throws out an error warning and says you shouldn't electronically file because it can't error check where there is an Override.

Does TT Premier allow you to use EasyStep to enter this data without having to override and thus allow you to error check and file electronically - or is it the same as Deluxe? In other words, should I upgrade to Premier for this one item?

[Hi Palms]

Unless the figure you have on Line 11B is one of the following, it does not go on Line 16 of Schedule A.

• Gambling losses (gambling losses include, but aren't limited to, the cost of nonwinning bingo, lottery, and raffle tickets) but only to the extent of gambling winnings reported on Schedule 1 (Form 1040), line 8b.

• Casualty and theft losses of income-producing property (including losses from financial scams) from Form 4684, lines 32 and 38b, or Form 4797, line 18a.

• Federal estate tax on income in respect of a decedent.

• A deduction for amortizable bond premium (for example, a deduction allowed for a bond premium carryforward or a deduction for amortizable bond premium on bonds acquired before October 23, 1986).

• An ordinary loss attributable to a contingent payment debt instrument or an inflation-indexed debt instrument (for example, a Treasury Inflation-Protected Security).

• Deduction for repayment of amounts under a claim of right if over $3,000. See Pub. 525 for details.

• Certain unrecovered investment in a pension.

• Impairment-related work expenses of a disabled person.

[DCO1]

This does not really answer the question

I can use Override to report the amount on the Misc Dedn worksheet so they will flow into Schedule A, Line 16. But what I want to try to do is avoid the error warning that says you shouldn't electronically file because it can't error check where there is an Override.

Does TT Premier allow you to use EasyStep to enter this data without having to override and thus allow you to error check and file electronically - or is it the same as Deluxe? In other words, should I upgrade to Premier for this one item?

[Hi Palms]

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@DCO1 wrote:

This does not really answer the question

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Yes, it does answer the question. 

I'll put it simply: You can't do what you're trying to do. Those expenses don't get entered on Line 16 of Schedule A. If you insist on doing it, go ahead and good luck because it's 100% wrong.

That's why I listed the expenses that can be entered on Schedule A and only those expenses are entered on Line 16 AND NO OTHER EXPENSES.

[PatriciaV]

According to the IRS Instructions for Schedule K-1 (Form 1041) Box 11, amounts reported on Form 1041 Schedule K-1 Box 11 Code B (non-miscellaneous itemized deductions) should be reported on the applicable line of Schedule A. Any excess not used in the current year cannot be carried forward to future years.

To enter these deductions in TurboTax, you will need to identify the non-miscellaneous deduction from the supplemental information provided with the K-1. Then review the IRS Instructions for Schedule A (Form 1040) to determine which line should be used. You can then select that topic under Deductions and Credits in TurboTax. No manual entries should be needed, nor should you need to upgrade.

For instance, if you are reporting state and local taxes, go to Federal >> Deductions & Credits >> Estimates and Other Taxes Paid >> Other Income Taxes >> Withholding not already entered on a W-2 or 1099. Choose a state from the State withholdings drop-down and enter the amount from Box 11 Code B.

@DCO1 

[Hi Palms]

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@PatriciaV wrote:

According to the IRS Instructions for Schedule K-1 (Form 1041) Box 11, amounts reported on Form 1041 Schedule K-1 Box 11 Code B (non-miscellaneous itemized deductions) should be reported on the applicable line of Schedule A.

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They are reported on the applicsble line of Schedule A BUT NOT Line 16 for the entire amount entered unless it is one of the items speficially stated to be reported on Line 16 by the IRS.

[CatinaT1]

You will enter your K-1 as it is with the amount listed in Box 11B. 

Then, go to forms mode to enter specifically what that amount was for. When you go to forms mode, look for the Misc Dedns in the forms column on the left. This is the Miscellaneous Itemized Deductions Worksheet. 

Scroll down to the Other Miscellaneous Deductions - Not Subject to 2% Limitation at the bottom. 

You will see a box checked on line 28. 

The fiduciary's explanation that Box 11B relates to 'portfolio income' is too vague. While we know the box is for expenses tied to that income, we need to identify the specific type of expense (e.g., investment fees, custodial fees, or legal costs). Check the 'Supplemental Information' page attached to your K-1. It should provide a detailed breakdown for Box 11 that specifies exactly what those expenses were

You will enter the amount from 11B on one of the lines 29-37 of the  Miscellaneous Itemized Deductions Worksheet depending on the type of expense. The expense will be one of the following:

• Federal estate tax paid on decedent's income reported on this return.
• Impairment-related expenses of a handicapped employee, from Form 2106.
• Amortizable bond premiums on bonds acquired before 10/23/86
• Gambling losses.
• Deduction for repayment of amounts under claim of right if over $3,000.
• Casualty/theft losses of income-producing property.
• Unrecovered investment in annuity.
• Ordinary loss attributable to certain debt instruments.
• Net Qualified Disaster Loss

[Hi Palms]

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@CatinaT1 wrote:

You will enter the amount from 11B on one of the lines 29-37 of the  Miscellaneous Itemized Deductions Worksheet depending on the type of expense. The expense will be one of the following:

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Not necessarily. You simply copied and pasted the deductions from the IRS instructions for Line 16 of Schedule A. The figure listed on Line 11B of the K-1 (1041) represents non-miscellaneous itemized deductions which could be a variety of expenses, such as state/local taxes, mortgage interest, et al., which would NOT be entered on Line 16 of Schedule A.

The trustee (or whoever prepared the 1041) should have included a statement with the K-1 detailing the type of each expense and the amount.