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Entering distributions for beneficiaries on Form 1041 in ProConnect

by Intuit•1• Updated 2 years ago

This article will show you how to enter distributions for beneficiaries on Form 1041 in Intuit ProConnect.

Before you start:

  • You must have at least one beneficiary entered on the Beneficiary/Grantor Information screen before entering in the percentage or dollar amount of distributions.
  1. Go to the Input Return tab.
  2. From the left of the screen, select Beneficiary/Grantor Information and choose 1041 Distributions.
  3. Select Distribution Percentages.
  4. Click the blue Details button to expand the input screen.
  5. Enter the percentage amounts to be distributed for Ordinary.
  6. Enter the percentage amounts to be distributed for Short-term.
  7. Enter the percentage amounts to be distributed for Long-term.

Enter the percentage amounts for the different types of income:

  • Under the Required (Sch. B, line 9) subsection for income required to be distributed.
  • Under the Other (Sch. B, line 10) columns for distributions that aren't required and final year returns.
 

The combined percentages in both the Required and Other columns must not equal more than 100%. This will cause the percentages to be too high and cause a critical diagnostic to generate.

The following critical diagnostics are generating for a fiduciary final-year return:

  • Total beneficiary's ordinary income percentage entered on Screen 7.1, 1041 Distributions:  Distribution Percentages is greater than 100%.  The total percentage entered in the Long-term columns for Required and Other (Schedule B, lines 9 and 10) can not equal more than 100% for all beneficiaries.  If 100% is entered in for both Required and Other then 200% of DNI or TAI is distributed to beneficiaries. (ref. #25516)
  • Total beneficiary's long-term capital gain percentage entered on Screen 7.1, 1041 Distributions:  Distribution Percentages is greater than 100%.  The total percentage entered in the Long-term columns for Required and Other (Schedule B, lines 9 and 10) can not equal more than 100% for all beneficiaries.  If 100% is entered in for both Required and Other then 200% of DNI or TAI is distributed to beneficiaries. (ref. #25512)
  • Total beneficiary's short-term capital gain percentage entered on Screen 7.1, 1041 Distributions:  Distribution Percentages is greater than 100%.  The total percentage entered in the Long-term columns for Required and Other (Schedule B, lines 9 and 10) can not equal more than 100% for all beneficiaries.  If 100% is entered in for both Required and Other then 200% of DNI or TAI is distributed to beneficiaries. (ref. #25510)

How do I resolve this error?

These critical diagnostics will generate when entries have been made on the 1041 Distributions screen in both the Required (Schedule B, Line 9) and Other (Schedule B, Line 10) subsections.

Follow these steps to resolve the diagnostic:

  1. Go to the Input Return tab.
  2. From the left of the screen, select Beneficiary/Grantor Information and choose 1041 Distributions.
  3. Select Distribution Percentages.
  4. Click the blue Details button to expand the input screen.
  5. Remove percentages from the Required (Schedule B, line 9) subsection:
    • Ordinary
    • Short-term
    • Long-term
  6. Enter percentages only in the Other (Schedule B, line 10) columns:
    • Ordinary
    • Short-term
    • Long-term

Important information

  • Percentages shouldn't be entered in both columns.
    • Exception: In an intial/final year, both columns may be used. However, the combined total shouldn't exceed 100%.
  • Percentages should only be entered in Other - Schedule B, line 10 in a final year.
  • Percentages should be entered as whole values (xxx.xxxxxx) and should total 100.
  • Percentages should be entered even if there is no income to distribute. They're also used to distribute capital loss carryovers and excess deductions on termination.
  • In a final year, dollar distributions shouldn't be used.
  1. Go to the Input Return tab.
  2. From the left of the screen, select Beneficiary/Grantor Information and choose 1041 Distributions.
  3. Select Dollar Distributions.
  4. Click the blue Details button to expand the input screen.
  5. Enter the dollar amounts to be distributed for Ordinary.
  6. Enter the dollar amounts to be distributed for Short-term.
  7. Enter the dollar amounts to be distributed for Long-term.

Enter the dollar amounts for the different types of income:

  • Under the Required (Sch. B, line 9) subsection for income required to be distributed.
  • Under the Other (Sch. B, line 10) subsection for distributions that aren't required and final year returns.

Additional Notes:

  • If you're unable to make entries on the 1041 Distributions screen, or receive a Data Entry Error ("Value must be between 0 and 100"), make sure that beneficiaries have been entered on the Beneficiary/Grantor Information screen.
  • If you need to adjust the amounts generated on the K-1 for the beneficiaries, this can be done on the Schedule K-1 Overrides/Misc screen.
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