Fiduciary depreciation not flowing to Schedule C, E, or F in Lacerte

This article will help determine why the depreciation isn't flowing to Schedule C, E, or F, when selected on Screen 27, Depreciation, and is instead shown as a statement on Line 9 of the K-1.

Depreciation for an estate return should flow to the beneficiaries/estate as the same percentage as ordinary income. 

Per the 1041 instructions, "Depreciation. For a decedent's estate, the depreciation deduction is apportioned between the estate and the heirs, legatees, and devisees on the basis of the estate's income allocable to each."

To reflect the depreciation for a specific client:

1. Go to Screen 9, Schedule K-1 Distribution Option.
2. Locate the Schedule K-1 Distributions Options section.
3. Enter a 1 in Depreciation: 1=in fiduciary, 2=prorate to beneficiary [O].

To reflect the depreciation for all clients:

1. Go to Settings.
2. Select Options.
3. Select the Tax Return tab.
4. Scroll down to the K-1 Distribution Options section.
5. Locate the Depreciation option.
6. Select Maintain in Trust from the dropdown menu.