Excess Deductions 1041

Forum|Forum|5 years ago
August 2, 2020
2 replies
28 views

I am working on a final 1041 where the only income is C.D. interest which is about 2k. The fees associated with the close of of the estate is about 18K so there are excess deductions on the K-1's. Are the beneficiaries able to use those deductions on their own 1040's and if so what line would those be added to?

Thank you

ProConnect Tax Online

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Best answer by Just-Lisa-Now-

This says under Proposed Regulations, did they get finalized? ProSeries still throws them from the K-1 to Sch A Misc Itemized Deds.

George4Tacks

Level 15

Be sure the file is marked FINAL.
Enter those fees in the appropriate Deductions category. More detail and I might be able to help. The excess should show up on the k-1 for each beneficiary. It would go from the k-1 to their separate 1040

Answers are easy. Questions are hard!

A

alyle99Author

Level 3

Thank you. I am just curious on what line the beneficiaries would put that deduction their personal 1040's and if it would actually benefit them?

Just-Lisa-Now-

Intuit Community Champion

They would be a misc itemized deduction on Sch A of the 1040 which were taken away with TCJA in 2018, the beneficiaries states may still allow those types of deductions but the federal no longer does.

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abctax55

Level 15

Consider this in determining how to treat those amounts:

https://www.irs.gov/forms-pubs/reporting-excess-deductions-on-termination-of-an-estate-or-trust-on-forms-1040-1040-sr-and-1040-nr-for-tax-year-2018-and-tax-year-2019

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A

alyle99Author

Level 3

Hi,

I think I agree with your solution. However the post above this states that they are misc itemized deduction and there is no benefit for the beneficiaries. However if you add the excess deductions to line 22 on on Schedule 1 there would be benefits to the beneficiaries because it is an adjustment to income. Any thoughts on that?

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