Form 1041 Sched B Line 2 Flow to Federal K1

[HnF Staff]

Hello,

I have a 1041 with the Adjusted Tax-exempt Interest on line 2 of Schedule B flowing to Box 14 on the Federal K1 with a code of A.  Code A is Net Earnings  or Loss from Self-Employment and this trust has only investment income. 

The California portion of the exempt interest income is on the K1 as a Statement that reads "Line 14D-Other (Itemize)" I presume that means it is supposed to be manually entered on the beneficiary's return, but where? I don't know why it would code it as Net Earnings from Self-Employment when it was clearly entered as Exempt Interest income on the DIV screen.

When I do a "Jump To Input" from the K1, it takes me to the Interest Income screen and there is no entry for exempt interest there at all. 

Is this a programming error? I'm new to this so I can't contribute much other than to say my box isn't accepting the idea that we need to do a manual entry on CA to keep the income from being taxed there. And that code in Box 14 doesn't feel rig