Not final K-1 for estate

[SKLBI]

I am trying to understand the K-1 I received for my parent's estate.  There are 4 beneficiaries so I know to divide the values on 1099s from investments by 4.   We are receiving a retirement-related check this year so this K-1 is not-final.

1. Ordinary div, interest, and net short term cap gain  on K-1 are all less than the 1099 value divided by 4.  What would cause that?    Would they be reduced if an expense was entered for the financial advisor who received commission when assets were bought?

2.  The long term capital loss does not appear.   Is this because it's not final year?  Would I assume the values are entered for the 1041 and will appear on the final K-1?

3.  Parent's house was sold less than 2 months after death. There were selling expenses- repairs, commission, lawyer.  Will these appear as a capital loss (box 11 on K-1) only next year when final K-1?   For that to happen, do they need to be entered for the 1041 this year?   I can't tell on my K-1 if this happened, correct?

4. Box 14 of K-1 has Code E and Code H.  I read Code E is sum of values reported elsewhere on K-1.  The investment numbers on K-1 don't equal the value for Code E. Should it be obvious (exact sum of other numbers)?

Code H is negative.  Would that value be on the 1099?

If it effects answers, all of the beneficiaries are children of deceased.

Thank you.

[tagteam]

You should make inquiry of the administrator, executor, or person responsible for preparing the 1041 for the estate.

Regardless, income/gain can certainly be reduced by deductions so that could be the reason the other figures are lower.

Capital gains typically remain with the entity (trust or estate) unless the administrator (or trustee) is given the authority to distribute all, or part of, the gains. Capital losses, however, are not distributed to the beneficiaries until the estate or trust terminates and a final 1041 is filed.

Some selling expenses can be deducted from the gross sales price (e.g., commissions, legal fees) while others, such as repairs and "fix-up" expenses are not deductible. If there is a loss, it will generally appear on the final K-1(s).

The Code H figure on Line 14 is an adjustment for NIIT (net investment income tax) and that figure will not appear on any 1099 (it gets transferred to Form 8960, if applicable).

Code E on Line 14 is net investment income and is taken from Line 4a of Form 4952. It may not line up otherwise since it excludes net gain from the sale of investment property.

[SKLBI]

@tagteam Would the capital gains loss be entered in the 1041 taxes this year even though it doesn't get distributed (via K-1) until next year's K-1?

Same for the selling expenses for the house?   

Thank you.

[tagteam]

Any net capital loss would not be passed through to the beneficiaries until the estate is terminated and the final 1041 is filed.

[SKLBI]

@tagteam   I understand. But does my brother need to enter the capital loss now in the 2023 1041 so that next year, he can enter it as a 2023 carryover?   Or he just saves the 2023 records and enters it for the first time on the 1041 for 2024.

[tagteam]

The net capital loss should be carried forward to the subsequent year's 1041 and then passed through on the final K-1.