How do I enter an incoming California K-1 (541) to my personal trust tax return 541 using Turbo Tax Business 2020? I entered the incoming Federal K-1 (1041) amounts just fine when using the Step-by-Step Mode in the Federal Taxes Tab or the Forms Mode under the Federal Section. But there is no place to enter the incoming K-1 (541) adjustment amounts in either the California State Forms Mode or Step-by-Step Mode. I need to tell Turbo Tax Business that there are California Adjustment amounts in Column (C) of the incoming K-1 (541)? Thank you.
*UPDATED to make question more clear.
**UPDATE #2 - Spoke with 2 Turbo Tax Support Reps (one was a CPA from their tax department) and both did not have an answer to my question. There seems to be no input screen in the California State 541 trust section of the TT Business program for California Adjustments located in Column (C) of an incoming 541 K-1. Their only solution was to have my return done by a local CPA. They both said that Turbo Tax does not have a direct support desk for their Turbo Tax Business CD/download program, which I find not only surprising but also very disappointing.
It is not quite clear which program you are using and which type of return you are trying to prepare.
Are you using TurboTax Business to prepare a 1041 and, if so, did you receive a K-1 (541) from another trust?
Obviously, you need to buy the state program from within TurboTax Business if you are preparing a California return for the trust.
Regardless, you should post more details.
Thank you for your reply. I did mention twice that I am using Turbo Tax Business. Do you need the year? It is for 2020. I also mentioned that it was for my personal 1041 so yes, I received a K-1 (541) from another trust. I received it from my mother's final Survivor's Trust. And yes, I purchased the California return for the trust. It seems that you fully understood my situation. I don't know what more information I can provide. Thank you again.
You stated "personal trust tax return" which is somewhat unusual since a trust is generally a separate entity for federal income tax purposes unless the trust is a grantor trust.
Regardless, you should be able enter Forms Mode and locate the K-1 you entered in the state section under Forms in My Return.
Unfortunately, I can only test the Illinois module since I do not have the California state module, but I can definitely see the Illinois K-1-T in the state section while in Forms Mode.
If you cannot resolve this particular issue, you might want to contact phone support.
Thank you for your reply. Yes, my trust is a separate entity with its own tax ID number. I shouldn't have used the term "personal". That was confusing. My estate tax attorney refers to my trust (as opposed to my mom's trust) as my individual trust. I subbed the word, personal, incorrectly.
In a nutshell, the beneficiary's K-1 from my mom's final trust flows through to my trust 1041. Then my 1041 K-1 flows through to my individual tax return 1040.
I entered Forms Mode and the only K-1 form under the California State section is the outgoing K-1 to the beneficiaries of my 1041 trust. There is no K-1 form for the incoming K-1 from my mom's final 1041 trust. That incoming K-1 form is only up in the Federal section and it does not have any fields or columns to enter the California Adjustments.
Thank you again. I will try phoning support.
I don't know if this will help, but the instructions for Line 5 of CA Form 541 state:
Line 5 – Rents, royalties, partnerships, other estates and trusts, etc.
Enter the total of net rent and royalty income or (loss) and the total income or (loss) from partnerships and other estates, or trusts. Do not include amounts for any of the following:
- Interest, enter on line 1
- Dividends, enter on line 2
- Capital gain or (loss), enter on Schedule D (541)
- Ordinary gain or (loss), enter on Schedule D-1, Sales of Business Property
Complete and attach federal Schedule E (Form 1040), Supplemental Income and Loss, using California amounts. Attach form FTB 3885F to report any depreciation and amortization deduction.
So far, I have spoken to 2 Turbo Tax support representatives and they are unable to help. Can you please confirm that the Illinois K-1-T line item that you see in Forms section of your 541 state module is for an incoming K-1 and not an outgoing K-1?
Can you please confirm that the Illinois K-1-T line item that you see in Forms section of your 541 state module is for an incoming K-1 and not an outgoing K-1?
The K-1-T is to be given to each beneficiary and it is obviously in the state module (the Illinois state fiduciary module). If adjustments need to be made, they would be made in Step-by-Step or in Forms Mode on the K-1-T(s).
I suspect you need to make any adjustments on your K-1 (541) schedules in the state module in your program. Schedule (K-1 541) would not typically appear anywhere else (although the K-1 (1041) should appear in your list of forms in the federal section).
Sounds like you only have the outgoing Schedule K-1 (Name of Beneficiary) form under the Illinois Estate/Trust section of Forms Mode, which is the same as the California State program. The incoming K-1 Trust (Name of Trust) form under the 541 section of Forms Mode is MISSING!
The 1041: Estates/Trusts section in Forms Mode has BOTH the Schedule K-1 (Name of Beneficiary) form AND the K-1 Trust (Name of Trust) form. The California State section should also have both of these forms. That's where I would have been able to input the California Adjustments.
Looks like I will have to do the California 541 by hand or go have it done by a local CPA. I also noticed that TurboTax Business did not produce any 541 AMT forms when it used the Federal 1041 return to calculate and create the 541 return. So, I doubt I can do those complicated forms by hand.
Any further suggestions?
Any further suggestions?
Not really since, clearly, Illinois and California must differ dramatically. For example, in my TurboTax Business test 1041 return, I can make adjustments on the IL-1041 in Step-by-Step mode and also in Forms Mode.
The Illinois return is not exactly simple, but the California return (541) must be rather complex, in which case I would suggest consulting with a local tax professional.