Proper location of K-1s within 1041 trust return

[mlpinvestor]

I'm preparing a 1041 trust return in Turbotax Business.  In the past, I've always printed and mailed in the forms from the "Tax Return Only" option.  This option randomly inserts the beneficiary K-1s into the middle of the tax return document, sandwiched between Form 8995 and Form 1116.  That seems odd.  Shouldn't they go at the end, or something?  The beneficiaries already receive these separately and report them on their taxes, but do the K-1s themselves need to go to the IRS with the 1041?  And is that the correct place for them?

[M-MTax]

Yes, you have to file the K-1s with the IRS if you're claiming an IDD.

See https://www.irs.gov/instructions/i1041#en_US_2024_publink1000286069

There really is no particular attachment sequence for them when e-filing (usually last anyway).

[mlpinvestor]

Thanks, will do.  But surely I don't need to include the K-1 instructions for the beneficiary?  Turbotax includes those in the tax return itself for some reason.

I'm just afraid if I send in stuff they're not expecting to be included, or if it's not in the right order, it won't scan properly or import into whatever system they use for digitizing paper returns.  I really don't know what they do with those.  I have to mail it in because Business doesn't support importing 1099s, so I only made summary entries.

[dmertz]

"I have to mail it in because Business doesn't support importing 1099s, so I only made summary entries."

You can e-file if the Forms 1099 do not show any tax withholding.

Form 1041 assembly sequence:

https://www.irs.gov/instructions/i1041#en_US_2024_publink1000286008

[mlpinvestor]

Thanks for the link.  That's helpful.

I can e-file even when I need to include my 1099-B from my broker?  I was under the impression that the IRS e-file system couldn't handle attachments.  On Form 8949, Turbotax puts "Vanguard See Attached Stmt" in Column A while giving the summary totals for basis, proceeds and gain/loss.  So I'll need to include that somehow.

[M-MTax]

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@mlpinvestor wrote:

I can e-file even when I need to include my 1099-B from my broker? 

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No, not with TurboTax Business. The software does not support attaching a 1099-B in the form of a PDF for the purposes of e-filing. 

[PatriciaV]

Because you are preparing a trust return from TurboTax Business (which doesn't accept attachments), the program will generate Form 8453. You can still e-file your return, but you'll need to mail a paper copy of your 1099-B to the IRS along with Form 8453, which you can print using these instructions: How do I get a PDF of my return?

Mail these completed forms to the IRS at the address below by the tax-filing deadline:

Internal Revenue Service

Attn: Shipping and Receiving, 0254

Receipt and Control Branch

Austin, TX 73344-0254

[mlpinvestor]

Hi, @PatriciaV.

Thanks, I'd forgotten about that.  But, upon further research, are you sure that option (Form 8453) is still available to 1041 filers?  The IRS website has this to say:

"Form 1041 was added to the Modernized e-File (MeF) platform in January 2014. MeF can accept the current and prior two tax years.

In processing year 2024, MeF will accept Form 1041 tax years 2021, 2022, and 2023.
In addition to prior tax years, MeF offers the ability to:

File amended 1041 returns
Attach any supporting documents as a PDF (Note: Documents can no longer be mailed to IRS if Form 1041 is filed electronically)"

See https://www.irs.gov/e-file-providers/estates-and-trusts

Does Turbotax use MeF?  I have no idea if a taxpayer can use this themselves outside of tax software.  I don't see an IRS link to it.

[PatriciaV]

TurboTax Business does not support attachments at this time. For this reason, to attach a PDF you will need to print, sign, and file the return by mail. The filing instructions are included in the forms for all business returns.