Which K-1 should a beneficary use?

[davidsson]

The really feels like a silly question, because the answer seems obvious, BUT, I want to be sure...

I will be distributing (to myself and brother as beneficiaries)...

Federal K-1 (from 645 joined estate/trust to 2 beneficiaries)

NJK-1s from Estate (to 2 non-NJ-resident beneficiaries)

NJK-1s from Trust (to 2 non-NJ-resident beneficiaries)

The federal K-1 has all details of distributed income... Interest, Dividends, etc.

The NJK-1s have one number each (Net income from estate/total distribution)

I believe for our individual FEDERAL and STATE 1040 returns, we use data from only the Federal K-1 received as a beneficiary (and ignore the NJK-1s)... is this correct?

Thank you for your patience and help!!

[PatriciaV · Accepted solution]

Yes. In general, the state Schedule K-1 has no additional information needed for your state tax return. However, as you work through the state interview, be sure you answer any additional questions that may refer to the state K-1.

[davidsson]

Thank you for the answer.

Just to be clear...

There is no NJ based income.

- I use the federal K1 for my federal and home state returns... got it.

- I don't do anything with the NJK1 received from the estate/trust (I don't need to file a personal return/anything in NJ)?  Is that correct?

Thank you again!!

[PatriciaV]

Yes, you are correct. If the NJK1 reports no income sourced in New Jersey, you do not need to file a New Jersey non-resident return.

[davidsson]

One of the beneficiaries resides in Florida.

Since there is no state income tax in Florida, they don't have to file in FL or NJ?

Correct?

[davidsson]

One of the beneficiaries resides in Florida.

Since there is no state income tax in Florida, they don't have to file in FL or NJ?

Correct?

[CatinaT1]

In a previous post you say: There is no NJ based income.

What property is in the estate/trust? Was there any income from the estate/trust? Any income produced from a NJ Estate or Trust would be NJ source income.

If there is NJ source income, you may have a Nonresident Filing requirement in NJ. 

NJ Nonresident Filing Requirements

[davidsson]

Most of the assets transferred directly from the banks/brokerage to the beneficiaries.  There was nominee income to the estate/trust.  The trust held a handful of stocks  and 2 bonds from a brokerage for a week or two.  The estate only held interest from a bank.

"The resident estate and trust... 

Did not have any tangible assets in New Jersey; and 

Did not have any income from New Jersey sources; and

Did not have any trustees or executors in New Jersey. 

The fiduciary of an estate or trust that meets all of the above requirements must file Form NJ-1041. Check the box on line 27 of the return, and include a statement written by the fiduciary certifying that the estate or trust is not subject to tax."

I have completed (Fed-1041 & K-1s and) NJ-1041 and distributed all income to beneficiaries on K-1 & NJK-1, included a letter with the state filing stating that the estate or trust is not subject to NJ tax.

It appears a non-resident beneficiary without NJ source income does not need to file taxes in NJ.

Isn't this correct?

My information is from here... https://www.nj.gov/treasury/taxation/pdf/pubs/tgi-ee/git12.pdf