Reporting Distributions on a 1041

[OneidaTN]

Turbotax requests that all distribution made be entered and then they appear on the 1041 Schedule B, Line 9 as INCOME REQUIRED TO BE DISTRIBUTED CURRENTLY.  The amounts entered in turbotax were the total of all distribution to heirs of corpus and income of the estate, not just income required to be distributed currently. This is confusing to me, and I was wondering if it is the correct presentation.

[Anonymous_]

When you started the return, did you indicate that the trust was a simple or complex trust?

[OneidaTN]

I indicated that it was a Decedent's Estate.

[Anonymous_]

In the case of an estate, TurboTax will show the amount you actually entered as having been distributed (in the Distributions section) on Line 9 of Schedule B by default.

It should be of no concern since the K-1(s) will appear correctly as will the IDD.

You can change the presentation by entering only the amount of net income distributed.

[DaveF1006]

Line 9 on Schedule B is determined by the entries you made when you reported the distributions made to each beneficiary.  If the beneficiaries received their full amount of the distributions, then there should be no additional concerns. it depends on what you entered on this page when you completed your return. i have included a screenshot on where this entry was made at the bottom of this post.

The IRS states in its instructions  for the 1041 that line 9 is to be completed by all simple trusts as well as complex trusts and decedents’ estates that are required to distribute income currently, whether it is distributed or not. I take this to mean all income that is to be distributed.  

Let me repeat, that any entries made in this section will appear in Section B, line 9 of the 1041.

@OneidaTN

[Anonymous_]

All income is deemed to be distributed in this instance (assuming it is required by the terms of the testamentary or other document), regardless of whether or not it is actually distributed.

Essentially, that means all income is reported on the 1041 as having been distributed, even if it actually has not been distributed to the beneficiaries.

[OneidaTN]

Thank you.  That is what I thought but appreciate you input.