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Entering excess deduction expenses on termination or Final Year distributions for Form 1041 in Lacerte

SOLVEDby Intuit81Updated August 09, 2023

If the estate or trust has final year deductions (excluding the charitable deduction and exemption) in excess of its gross income, the excess is allowed as an itemized deduction to the beneficiaries succeeding to the property of the estate or trust.

 This will automatically calculate when deductions exceed income and the estate or trust is marked as final in Screen 2.1 - Miscellaneous Information, "Final Return" checkbox (code 22) and beneficiary percentages are entered in the "Other" column in Screen 7.1 - Distribution Percentages.  Do not use Dollar amounts.

Overrides are also available in Screen 43 - Schedule K-1 Overrides/Miscellaneous in the Final Year Deductions (11) section.  Enter a percentage (code 503) or an amount (code 19) in the appropriate field under Excess Deductions on Termination (11A)

This amount flows to the Schedule K-1, Box 11 with code A and a supporting statement.

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