When working on a Fiduciary return, you come across an adjustment on the 1041 Schedule K-1, Box 14H - Adjustment for section 1411 net investment income or deductions.
The Schedule K-1, box 14 H calculation is the difference between the Schedule B, line 15 (Income Distribution Deduction) and the amount deducted on Form 8960, line 18b for amounts of Net Investment Income distribution to the beneficiary.
If the Net Investment Income on Form 8960, line 8 is equal to Form 1041, line 9 the distribution deduction will be the same for both and an adjustment will not be generated in box 14 H of the Schedule K-1.
For more information, you may review the IRS instructions for Form 1041, namely page 44.
Even though the Form 8960 may not be generating, you can still view the form to see the amounts.
To override Lacerte's calculation:
- Go to Screen 43, Schedule K-1 Overrides/Miscellaneous.
- Click on the Beneficiary from the left-hand navigation panel.
- Scroll down to the Other Information (14) section.
- Enter an amount or -1 in Other modifications to net investment income (H).
There is a defect submission to provide a worksheet for this line ATC-5688 (won't fix), as well as to provide a calculation for this line ATC-5732 (fixed rounding issues TY2013) .
Individual Module: There is a new input in the Individual module Screen 20.3 14H that has some information in the F-1 help that may help the preparer understand.
Enter the amount from Schedule K-1, Form 1041, box 14, code ?H?.
Note: If the amount reported is a positive number, the program will carry it to Form 8960, Other Modifications to Investment Income. The amount will also increase Form 8960 MAGI by the same amount.
If the amount reported is a negative number, the program will still carry it to Form 8960 as a modification, but it will not automatically affect Form 8960 MAGI. If the trust has indicated some (or all) of the adjustment also requires a MAGI adjustment, make an entry in Screen 45.3, Other Taxes to adjust Form 8960 MAGI.
The calculation works correctly when all the income and deductions have been distributed correctly on screen 7.1 totals 100% when it does not total in all three boxes, the calculation will not add up.
