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

by Intuit Updated 10 months ago

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.
Lacerte Tax

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