Common questions for Fiduciary Schedule D in ProConnect Tax

Select below to see solutions to frequently asked questions concerning Schedule D in a Fiduciary return.

How do I attribute the sale of an asset to corpus rather than to income in a Fiduciary return?

To attribute the gain on a sale of an asset to corpus and not income:

1. Enter a 2 in "Form 4797 ordinary gains (loss) charged to: 1=income, 2=corpus [O]" in General ⮕ Accounting Income.
2. Enter a 1 in "TAI distribution limitation: 1=yes, 2=no [O]" in Beneficiary/Grantor Info ⮕ Schedule K-1 Distribution Options.
3. Enter the amount that should appear in Schedule K-1 box 5, or -1 if the amount should be zero, in the field "Other portfolio and nonbusiness income (5)", found in the Income section of Schedule K-1 Overrides/Miscellaneous.  If more than one beneficiary has been entered for the client file, this entry must be made per beneficiary.
4. The entry in step 3 will prompt the program to make an AMT adjustment in box 12.  Override by entering a -1 in the field "Adjustment for minimum tax purposes (A)", located in Alternative Minimum Tax Items (12) section of Schedule K-1 Overrides/Miscellaneous.   If more than one beneficiary has been entered for the client file, this entry must be made per beneficiary.

The entries above will keep the gain on the sale of asset at the Fiduciary level and allow it to be taxed on the Form 1041 rather than having the gain pass through to the beneficiaries to be taxed at the Individual level.