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Form 1041, owning a Partnership Interest

Level 2

My Trust client owns a partnership interest that made a large cash distribution.  Is there a place to show that on the partnership's Sch K-1, that would be Proseries input form K-1, that there was a cash distribution?  I find no input line or input box 

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Level 3

In ProSeries desktop, enter the information from the 1065(K-1) you received on the Form 1041's "K-1 Entry Wks-Partnership" form, entering the various income, credit etc, items ... and entering the distributions on line 19, Code A of that worksheet. Now go to page 1 of the 1041 and on line 8, write in "Pass Thru Distribution Income" and the enter that Line 19 distribution amount. That fixes your DNI.

Now go to page 2 for the 1041, and in Sch B, find the smart worksheet after Line 7 entitled "Trust Accounting Income Smart Worksheet and ...". Drop down to the 1st write-in line and enter "Pass Thru Income Adjmt" and enter a negative amount matching the income item(s) reported to you on the 1065(K-1) you received so that the result on Sch B, Line 9 equals the page 8 write-in amount. That fixes your Trust Acctng Income and your required distribution calculation.

If this answers your question, please mark it SOLVED so other can easily find the answer. Thanks

 

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4 Replies 4
Level 13

The distributions of the Partnership should be in Box 19 of the 1065 K-1.  Is it there?  If not, you may need to contact the person that prepared the Partnership return to clarify why nothing is there.

Level 2

Thank you.  Yes, my issue is not with the Form 1065, Sch K-1, it is with entering the information into the ProSeries partnership input schedule.  For trust accounting income, the income is not the K-1 net income shown on the Partnership K-1 but is instead the distribution under the Uniform Principal and Income Act.  I was hoping to see if Proseries would use the cash distribution as income for TAI and then use net income on the Partnership K-1 for tax income purposes.  I suspect it is a little too complicated for Pro Series.  Just thought I would give it a try.

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Level 13

I know that with other things (such as Basis limitations) if Box 1 is not what should be taxed, you need to manually enter Box 1 with the amount of what should be taxed, and manually carry over any excess amounts.

I would GUESS it is the same thing for your situation.  Maybe somebody who is experienced with this situation may come by and offer a better suggestion.

Level 3

In ProSeries desktop, enter the information from the 1065(K-1) you received on the Form 1041's "K-1 Entry Wks-Partnership" form, entering the various income, credit etc, items ... and entering the distributions on line 19, Code A of that worksheet. Now go to page 1 of the 1041 and on line 8, write in "Pass Thru Distribution Income" and the enter that Line 19 distribution amount. That fixes your DNI.

Now go to page 2 for the 1041, and in Sch B, find the smart worksheet after Line 7 entitled "Trust Accounting Income Smart Worksheet and ...". Drop down to the 1st write-in line and enter "Pass Thru Income Adjmt" and enter a negative amount matching the income item(s) reported to you on the 1065(K-1) you received so that the result on Sch B, Line 9 equals the page 8 write-in amount. That fixes your Trust Acctng Income and your required distribution calculation.

If this answers your question, please mark it SOLVED so other can easily find the answer. Thanks

 

View solution in original post