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Deductions entered in the Estates and Trusts 1041 program that may be allocable to the Estate/Trust and/or to the Beneficiary are entered under the Estate/Trust column and/or the Beneficiary/Accounting Income column. The following information will help to determine where to make each entry and how the amounts will then flow in the return.

  • Estate/Trust column: Enter amounts in this column which are ONLY allocable to the Estate or Trust. These amounts will ONLY flow to Form 1041 U.S. Income Tax Return for Estates and Trusts and NOT to the individual Schedule(s) K-1 (Form 1041) Beneficiary‚Äôs Share of Income, Deductions, Credits, etc.
  • Beneficiary/Accounting Income column: Enter amounts in this column which are allocable to the Beneficiaries and to the Estate or Trust. These amounts will flow to BOTH Form 1041 and the individual Schedules K-1.

To enter deductions in the 1041 return:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Deductions in the Federal Quick Q&A Topics menu to expand, then click the deduction you wish to enter (some deductions may need to expand before you can click on the exact one you want).
  3. Continue with the interview process to enter all of the appropriate information.

To review all of the deductions:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click the blue Step-by-Step Guidance link in the gray box near the top, then click Skip or No until you reach the Deduction questions.
  3. Continue with the interview process to enter all of the appropriate information.

Once the deduction amounts are entered in the program, they will flow through the program as explained below:

  • Accounting Income Worksheet: Reflects the total income amounts by category and the deduction amounts prorated by category to calculate the amount to flow to the Schedule K-1 Total Allocations Worksheet.
  • Schedule K-1 Total Allocations Worksheet: Reflects each income amount by category already reduced by the applicable deductions. These amounts will be proportionately transferred out to the individual Schedule(s) K-1.
  • Schedules K-1: Reflects the final distributive amounts to be provided to each beneficiary based on the their beneficiary percentage. The percentage(s) are entered through the K-1 Wizard during the Q&A Interview.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.


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