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199A REIT Dividends Flowthrough on 2019 1041 Tax Return for K-1 Beneficiaries

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Level 2

Working in the 1041 tax return for 2019.

199A information for REIT Dividends Box 5 was entered in Form 1099-Div Worksheet.

199A REIT Dividend information flows through to the Interest/Dividend Income Work.

This is a complext trust 1041 tax return.

There are 4 beneficiaries thus 4 K-1 Forms with 25% ownership interests.

All of the distributed net income (line 7, 1041 tax return) is going out 25% to each of the beneficiaries.  Trust is not paying the tax.  All income is flowing out to beneficiaries. 

When I look at the beneficiary K-1 forms I see the program allocating properly their share of dividends, qualified dividends, interest income, tax exempt income, and foreign tax.

What I need clarification on it why the 1041 tax program is not allocating the 199A REIT dividend information coming off the 1099 Investment Report to each of the beneficiaries K-1 Forms.

Am I missing something.  Is the 1041 tax program supposed to be doing this allocation or the allocation should not be happening for some reason or am I supposed to be manually putting in this allocation on each of the K-1 forms.

 

 

 

 

 

 

 

 

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12 Replies 12
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Level 15

It could be because the K-1 may not be ready for the 199 stuff yet.  Individual returns are lagging behind on K-1s handling QBI so the 1041s could be in the same boat.  If you can get it loaded in manually, I would go that route rather than waiting for any updates that may or may not be on the horizon.

ex-AllStar, ex-Lutefisk taste taster, ex-ACME product tester
and ex marks the spot where those rocks and anvils hit me.
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Level 2

Yes - that is possible and the only explanation for now based upon a convervation I had with the proseries business technical department for which I was on hold for many hours which is another issue.  If what I have been is accurate there is a final update for 199A forms for 1041 due 2/21/2020.

What I don't like is the 1041 return acts like it is ready for filing when you put in 199A related information.

What I should see from the program is you input information into box 5 for 199A dividend information and at the top of the screen there should be some form of indication that there is a form not ready yet thus the entire return can not be e-filed until this date.

Most of the time that happens when any form is not ready but for whatever reason when inputting information into that particular specific box on the dividend/interest 1041 worksheet this message is not happening.

As of right now this issue has not been resolved and I am not convinced my question was really answered yet.  Yes there is a form not updated yet for 199A but the second question is am I supposed to be seeing a flow through of this information to the K-1 form - yes or no. 

I am assuming that this update on 2/21/2020 will fix the issue I am making an inquiry about.

 

 

 

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Level 2

I'm also encountering this same issue. It is now 2/23/2020 (after the supposed update)...the K1 still does not report the flow through of the 199A REIT dividends. Can someone help with this issue?

Original post question repeated: Yes there is a form not updated yet for 199A but the second question is am I supposed to be seeing a flow through of this information to the K-1 form - yes or no. 

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Level 1

I have the same problem. today is 02/27/2020 and it is not flowing through, mine is simple trust and it won't flow, maybe I don't know how to feel it up ,  

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Same problem here.  Oddly enough, when the same data file is used on a "stand alone" system, the 199A info flows to the K-1's perfectly.  Not so on our network workstations.  Go figure?? ProSeries 1041 software is almost hopeless.  They could do do much better.  After 25 years of using it, I have about had it.

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Still waiting on a fix to this problem.  

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I spent 3 hours with Tech Support last Thursday.  I was able to prove to them that the network version is not handling 199A allocations at all, and that the stand alone version is handling it perfectly.  I sent them a sterilized file and they got the same results I did with the network version and the stand alone.  I have not heard a word from them since.  The problem was pushed up the chain to the programmers.  Nothing like sitting here on 3/2/20 waiting for software corrections that should have been worked out in 2019.  These issues unfortunately are annual events with ProSeries 1041.  

 

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Received an email saying this problem has been fixed  Case Number [social security number removed]

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Indeed the problem was fixed in last week's 1041 update.  I am thankful it is not April 1st.

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Level 1

Should the ProSeries 1041 program be allocating the 199A dividends that are flowing through to the simple trust Beneficiary K-1s or are we supposed to manually enter the amounts on the Beneficiary K-1s? 

The program does not seem to be doing anything with the 199A amounts I have entered on the Int-Div Worksheet (Box 5) or K-1 Partner (PTP Line 20 Z).   Should I be entering the data somewhere else to get the calculation to flow?

If we are required to manually enter the amounts, should we be allocating deduction to the amounts like we would to tax exempt income?

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ProSeries will now automatically allocate the 199A income to a Statement A for each beneficiary that receives distributions.  The 199A statement may reflect expenses against it much like T/E income depending on the trust document and the type of trust (simple v. complex).  On a simple trust, your 199A dividends probably should flow to the Statement A in full with no expenses against it.

Make sure you enter your 199A dividends from your 1099 in the 199A field on the Int-Div worksheet.  Make sure you have the latest 1041 update (2019.12.0.0) 

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Level 1

Thank you for your response -- I now see that my problem was that I was expecting to see the information on the Beneficiary's K-1 Worksheet under 14I, but it is in fact being generated as a 199A Stmt A Summary to the K-1.  So apparently working.

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