Pre-Paid Funeral Expense

Forum|Forum|5 years ago
January 24, 2021
2 replies
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I’m talking about a pre-paid Funeral expense package, not a business k1. How do I enter the Interest, Dividends and Capitol Gains using the Premier Turbo Tax?

Dennis Fleishman

M-MTax

Level 15

Those pre-paid funeral deals are set up as trusts so you put the K-1 in as a trust.....look at the form....does it say "1041" anywhere?

DfleishmanAuthor

Level 2

Thank you for your help!

DfleishmanAuthor

Level 2

You do need to enter the information from the Grantor Trust Tax Information Statement.

The Grantor Letter or Information Sheet is a document that was sent to the IRS, that shows you as a recipient of various forms of income, and possibly having certain deductible expenses. Enter the information listed in the Grantor Letter in the places where you normally would, had you paid or received these items directly instead of through a trust.

You report each income and expense item as if you had received an equivalent 1099, using the name and EIN of the Trust as the payer. So treat interest as if a 1099-INT, dividends as if a 1099-DIV, Gains and Losses as if a 1099-B, etc.

Some of the more common items and where to add them include the following:

Income Items

Click on Federal Taxes > Wages & Income [In TT Home & Biz: Personal > Personal Income ]

Taxable interest and dividends - Interest and Dividends > Interest on 1099-INT [or Dividends on 1099-DIV]
Ordinary income - Investment Income > Stocks, Mutual Funds, Bonds, Other [or one of the other categories listed]
Capital gains and losses - Investment Income > Stocks, Mutual Funds, Bonds, Other

Deductible expenses

Click on Federal Taxes > Deductions & Credits [In TT Home & Biz: Personal > Deductions & Credits > I'll choose what I work on].
Go to the appropriate section, like Your Home > Property Taxes or Charitable Donations > Donations to Charity in 2015.

Pattif12,

Thank you for the information. I guess I can use this method instead of filing a K-1?

I understand how to enter the Interest using 1099-INT and the dividend using 1099-Div. How would I enter the Capital Gains? Should I go directly to line 7 on the 1040? Is there an easier way? Also, how would I enter the Fiduciary Fees Paid as a deduction?

Thanks for you help!!

Dennis Fleishman

DianeW777

Level 15

The Grantor Tax Advice Letter or Information Sheet is a transmittal document, copied to the IRS, showing you as a recipient of various forms of income, and possibly having certain deductible expenses.

Enter the information listed in the Grantor Letter in the places where you normally would, had you paid or received these items directly instead of through a trust.

Some of the more common items and where to add them include the following:

Income Items

Click on Federal Taxes > Wages & Income (In TT Home & Biz: Personal > Personal Income)

Taxable interest and dividends - Interest and Dividends > Interest on 1099-INT [or Dividends on 1099-DIV]
Capital gains and losses - Investment Income > Stocks, Mutual Funds, Bonds, Other

Note: After the Tax Cuts and Jobs Act (TCJA) these expenses are no longer deductible on itemized deductions.

@Imhebert5

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