I do not do the beneficiaries returns so, I don't know. The little bit of tax is showing on the MI-1041 as tax owed eventhough the federal 1041 shows zero tax because the CG flows to the 1041 K-1s. The Michigan 1041, also, should not show a tax owed because the beneficiaries have to take care of paying the tax on the CG on a personal level, federal and whatever state they reside.