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How to flow tax withholding to the K-1 in a final year 1041 in Lacerte

by Intuit Updated 1 year ago

Tax withholding from Form 1099 flows to line 24e of the Form 1041. If you want this amount to be distributed to the beneficiary's K1, follow the steps below: 

An option must be set to indicate to the program that credits should flow to the beneficiary rather than remaining in the fiduciary.

To make the change for all clients: 

  1. Locate and click on the Settings drop-down menu.
  2. Click on the selection labeled Options.
  3. Select the tab labeled Tax Return.
  4. Select the option labeled K-1 Distributions from the left navigation panel.
  5. Set the drop-down field labeled Credits to Prorate between Beneficiary/Fiduciary

 To make the change for a single client only: 

  1. Navigate to Screen 9 - Schedule K-1 Distribution Options.
  2. Locate the field labeled Credits: 1=in fiduciary, 2=prorate to beneficiary [O], and input a 2
    • Lacerte will use the beneficiary allocation percentage to distribute to the beneficiaries.
  3. Navigate to Screen 43 - Schedule K-1 Overrides/Misc.
  4. Click on the section labeled Percentage Overrides located in the lower portion of the left navigation panel.
  5. Enter a percentage amount in the field labeled Tax credits (xxx.xxxx) (code 504). 
  6. Make sure to include the correct percentage for each beneficiary.
  7. The figure will then show on line 13b of the K-1.
Lacerte Tax

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