Why is Turbotax producing k-1 forms for beneficiaries when the estate is paying all taxes due on the 1041 return ?

[mett2018]

My mother's estate consisted of stocks/mutual funds which were sold.  There was a small gain (3,000) in the value of the stocks and income of 2,000 in dividends and interest.   The estate of approx. 300,000 was distributed between 3 daughters.  The estate is paying the tax on the $ 5,000 of income.

[Anonymous_ · Accepted solution]

" Why is Turbotax producing k-1 forms for beneficiaries when the estate is paying all taxes due on the 1041?"

When you make a distribution to beneficiaries during the same year you are filing an income tax return for the estate (or within 65 days following the close of that year if an election is made), the distribution carries with it distributable net income (DNI) and that income is taxable to the beneficiaries.

In short, this is the default behavior of TurboTax Business and is in accordance with the tax code and regulations.