My deceased parents trust just sold their house in 2022. The trust will dissolve in 2022, and hence the beneficiaries will receive a schedule K-1. The question is how on turbo tax do you deduct the house cost basis and cost of selling the house, from the gain? I see you enter the K-1 information under Bossiness items- but then turbo tax does not prompt for the entry of the cost basis nor costs of selling. Please advise as to how this is done- thanks
Are you using TurboTax Business (or planning to use the program)?
The basis, sales price, and selling expenses will be reported on Form 1041.
thanks- no Im using Premium. So Business will prompt me to add that information? I understand it will go on that form, but need Turbo tax to use the info to correctly calculate.
Ok ... first the trust will file the form 1041 and issue each beneficiary a K-1 form reporting the net gain being passed thru to them. The selling price & cost basis will be reported on the 1041 NOT your personal tax return.
If you are completing the trust return then you need to use the correct program for a 1041 ... you will need the downloaded BUSINESS program for windows ... there is no online or mac version : https://turbotax.intuit.com/small-business-taxes/
@Critter-3 has provided you with the correct information.
However, if you have no experience with preparing an income tax return for a trust (or any other pass-through entity), you might want to seek guidance from a tax professional.
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