Filling Out Idaho (ID) K-1 - Where to enter Depreciation?

[magiklamp]

I'm filing a 1041 for a pass through entity, an estate. The estate earned income through rental real estate and distributed all of the income to beneficiaries. Turbotax generated Federal K-1's with the following relevant info:

Box 7 (Net rental real estate income): 23,270

Box 9 (Directly apportioned deductions): A*  12,582

Box 12 (Alternative minimum tax adjustment): G* 4,151

I'm also manually filling out the Idaho K-1. Does anyone know where in the Idaho K-1 I should enter the $12,582 figure (the "Directly apportioned deductions"), which is the depreciation for the rental property?

The instructions for the ID form are bundled together with the form:

https://tax.idaho.gov/forms/EFO00201_02-03-2020.pdf

I've read through the instructions but haven't found them helpful for accounting for the depreciation.

Here are the lines of the Idaho K-1 that pertain to income, additions, subtractions:

Federal Income

7. Ordinary income (loss) 
8. Net rental real estate income (loss) 
9. Interest income 
10. Ordinary dividends 
11. Royalties 
12. Net short-term capital gain (loss) 
13. Net long-term capital gain (loss) 
14. Other income (loss). Include schedule 
15. Section 179 deduction 
16. Guaranteed payments subject to Idaho apportionment factor 
17. Charitable contributions 
18. Trust/Estate income 
19. Subtotal, federal income 

Idaho Additions

20. State, municipal and local taxes 
21. Interest and dividends not taxable under
Internal Revenue Code (IRC)
22. Bonus depreciation addition 
23. Other Idaho additions. Include schedule 

Idaho Subtractions

24. Interest from Idaho municipal securities included in
line 21, net expenses 
25. Interest on U.S. government obligations, net expenses 
26. Idaho technological equipment donation 
27. Bonus depreciation deduction 
28. Other Idaho subtractions and descriptions 
29. Subtotal net business income 

Allocated Income

30. Guaranteed payments sourced as compensation to Idaho 
31. Guaranteed payments sourced as compensation
to another state 
32. Other allocated income. Include schedule 
33. Total allocated income 
34. Idaho distributable income 

[taxes4sumting]

Looks to me like you'd net the rental income on Box 7 and the Box 9 directly apportioned deductions and then enter the sum of the 2 on Line 8 on the ID return - but I wouldn't swear to that. You can call the ID State tax commission if you're still unsure.

[magiklamp]

Thanks. That's what I was thinking. I'll call ID State tax commission and will update this thread if I get a clear answer.

[magiklamp · Accepted solution]

I spoke with someone at the ID State Tax Commission and was advised that I should fill out the Idaho K-1 as follows (note that this assumes that the only source of distributed income is rental real estate):

Line 8 (Net rental real estate income (loss)) Column A (Federal): enter the gross income from rental real estate (i.e., not accounting for depreciation).

Line 18 (Trust/Estate income) Column B (ID Apportioned): enter the net of the income less depreciation.

Thus Line 18 should be the same amount entered for this beneficiary's ID PTE-12 (Schedule of Pass-through Owners) column (b) (ID Distributable Income; applies to beneficiary who has signed a PTE-NROA and whose filing code on PTE-12 is "A").

I also chose to include an attachment in "Part X - Supplemental Information" of the ID K-1 that looks something like the following (where the $ amount is that which appears in Line 18):

Attachment 1
Trust/Estate income for non-resident beneficiaries
Part IV, Line 18

Net rental real estate income (loss) $____.
Total $____.

(This amount accounts for beneficiary's directly apportioned deductions. See beneficiary's Federal Schedule K-1 (Form 1041)).