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Capital gains and losses (Investment income) can be allocated to the Beneficiaries. To indicate this in the program, please follow the directions below.

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click the menu icon in the upper left-hand corner, then select Federal
  2. Click Investment Income to expand the category and then click Gain or loss on sale of investments
  3. Click Beneficiaries' share of capital gain/loss 
  4. The program will proceed with the interview questions for you to enter or review the appropriate information.

Per the IRS Form 1041 Instructions, page 29:

Line 3
Include all capital gains, whether or not distributed, that are attributable to income under the governing instrument or local law. For example, if the trustee distributed 50% of the current year's capital gains to the income beneficiaries (and reflects this amount in column (1), line 19 of Schedule D (Form 1041)), but under the governing instrument all capital gains are attributable to income, then include 100% of the capital gains on line 3. If the amount on Schedule D (Form 1041), line 19, column (1), is a net loss, enter zero.


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