How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask CGCPA Your Own Question

CGCPA
CGCPA, CPA
Category: Tax
Satisfied Customers: 3740
Experience:  over 40 years experience in tax matters
50756543
Type Your Tax Question Here...
CGCPA is online now
A new question is answered every 9 seconds

Im completing a 1041 form for my uncles estate. He has 10

Resolved Question:

I'm completing a 1041 form for my uncle's estate. He has 10 beneficiaries (5 are people, 5 are charities) each receiving 10%.

I am claiming 50% of the income earned for the estate as a charitable deduction. Do I still send out K-1 forms to these five charities showing their pro-rata share of the income?

Thank you!
Submitted: 3 years ago.
Category: Tax
Expert:  CGCPA replied 3 years ago.

Welcome to Just Answer. I am here to help you resolve your tax and finance concerns. Please feel free to ask anytime you need extra help.

 

You should send the charities a K-1 to accomplish 100% accounting for the estate income.

Customer: replied 3 years ago.

So I shouldn't take the charitable deduction on Schedule A, correct? Because if I do, I am reducing the taxable income of the individuals twice - one by taking the income deduction for the charities, and two by sending out K-1's to these same charities with their pro-rata share of the net income (that I just used as a charitable deduction).

 

On the initial 1041 return, does it make sense that the beneficiaries are only being taxed on the K-1 for the estate's interest & div income? It looks the estate is being taxed for the long term capital gains. Thank you for your help!

Expert:  CGCPA replied 3 years ago.
The charitable contribution amount should be reflected at 10% for each beneficiaries K-1. Any residual income should also be spread at 10% for each beneficiary.
Customer: replied 3 years ago.

Let me make sure I understand what you're saying - let's say the estate is worth $100,00 and we're dividing it between 10 beneficiaries in equal shares. Five of the beneficiaries are charities.

 

Estate Income generated on the $100,000 corpus was $10,000 for the tax year. To make it simple we'll assume no other expenses.

 

Are you saying I can take 50% of the $10,000 in income and allocate it as a charitiable deduction on schedule A? So my net income to be distrubuted between the 10 beneficiaries (5 of which are these same charities) would now be $5,000? Each beneficiary, regardless if they are an individual or a charity would get a K-1 showing income of $500. In effect, the charity is getting a reduction in their distributed income reported on the K-1 based on a charitable deduction taken by the estate? Sounds like I'm double dipping - I thought I could either take the Sch A Charitable deduction and not issue K-1's to the charitable beneficiaries, therefore allocating 100% of the income between the 5 individuals, OR not take the Sch A Charitable deduction and equally distribute income between all 10 beneficiaries and issue K-1s.

Expert:  CGCPA replied 3 years ago.
You need to issue the K-1s to the charities since they are beneficiaries. However, the $10,000 would be reflected as $1,000 to each beneficiary (using your example) of which the charities would then receive a payment for their share and the other beneficiaries a payment for theirs. The deduction would not be claimed. Sorry if I confused at first.
Customer: replied 3 years ago.
Makes sense! Thank you very much!
Expert:  CGCPA replied 3 years ago.
You are quite welcome.
CGCPA, CPA
Category: Tax
Satisfied Customers: 3740
Experience: over 40 years experience in tax matters
CGCPA and 2 other Tax Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
 
 
 
Chat Now With A Tax Professional
CGCPA
CGCPA
Tax Professional
3740 Satisfied Customers
over 40 years experience in tax matters