I am filing 1041 for a trust and have interest that partially belongs elsewhere

[purplehiss]

I have a 1099-Int that came in against a Trust. A portion of this belongs to a decedent return and I have created a 1099 using QEF for that person. Do I now just enter the portion that belongs to the trust, or do I enter the full amount and show a negative adjustment? If I need to show a negative adjustment, do I do that like a new 1099-Int with a negative number? Who would be the 'payer' of the negative value?

[Anonymous_ · Accepted solution]

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@purplehiss wrote:

...If I need to show a negative adjustment, do I do that like a new 1099-Int with a negative number? Who would be the 'payer' of the negative value?

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Enter the full amount and show a negative adjustment on a new 1099 with the payer being the trust.

[purplehiss]

Thank you for taking the time to respond!

[gloriah5200]

To clarify, since you have already entered a 1099-int to show a distribution of a portion of the trust interest income going to the decedent final return, then you can do either way.  If the software will allow you to enter the full amount and then subtract out the amount paid to the decedent as "decedent final return" portion, it makes for a cleaner return for IRS to follow.  

TurboTax may not allow you to enter a - entry for the decedent final return share, so if it won't, then you can just enter the portion that  belongs on the trust return and name it with detail, like "Bank Interest Less Decedent Final Return portion" and then enter the remaining amount that stays on the trust return.

The Trust return should show the amount of interest income carrying into the trust and the decedent final return should show the amount carrying to the Decedent Final Return per the following:

IRS Publication 559

[Anonymous_]

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@gloriah5200 wrote:

TurboTax may not allow you to enter a - entry for the decedent final return share....

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To clarify, TurboTax Business, in fact, does allow the user to make a negative entry on a 1099-INT (which is the reason I made the suggestion in my earlier post).