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Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 7151
Experience:  Extensive Experience with Tax, Financial & Estate Issues
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I received a Schedule K-1(Form 1041) this year. Line E is checked

Customer Question

I received a Schedule K-1(Form 1041) this year. Line E is checked for being a final Form 1041 in Part I. In Part III line 11 has a total of $3592 with code A. I understand that it goes on Schedule A, line 23 if I have enough to itemize, which I don't.
Line 14 has $261 with code I, and $238 with code I also. The instructions say "See the beneficiary's instructions."
My question is where do I file the $261 & $238 at on my tax forms?
Submitted: 1 year ago.
Category: Tax
Customer: replied 1 year ago.
If this $261 & $238 is considered income, should I not receive this money from the trust?
Expert:  Stephen G. replied 1 year ago.
Unfortunately, the beneficiaries instructions say that the fiduciary will provide you with the additional information you need to determine the proper reporting on your return as follows:The fiduciary will provide you with any additional information you may need to file your return that is not shown elsewhere on this Schedule K-1.If you receive a statement regarding the splitting of foreign tax credits from the income to which it relates, section 909 may prevent you from deducting the foreign tax credit until the related foreign income is taken into account. See Form 1116, Foreign Tax Credit, and Pub. 514, Foreign Tax Credit for Individuals, for more information.So, if that information is not enclosed with the K-1, you'll need to check with the fiduciary to find out what those items represent.
Customer: replied 1 year ago.
Not foreign tax credit. It say "Basic Adjustment Farm Rental." Where do I enter this information on my 1040?
Expert:  Stephen G. replied 1 year ago.
It sounds like an adjustment for the Alternate minimum tax.How much is your Adjusted Gross Income at the bottom of page 1 of your 1040?
Customer: replied 1 year ago.
$54,488 before I enter anything from Schedule K-1
Expert:  Stephen G. replied 1 year ago.
Are those the only figures on the K-1?
Customer: replied 1 year ago.
Yes line 11 & line 14 only. No other figures.
Expert:  Stephen G. replied 1 year ago.
Since your AGI is too low for the AMT and you have no farm rental income, there no place to enter the items on Line 14 on your return.
Customer: replied 1 year ago.
Some of the land was rented out. So I don't have to include it then?
Expert:  Stephen G. replied 1 year ago.
I thought you said there were no other figures on the K-1?
Customer: replied 1 year ago.
Line 14 is the one that has the farm income figures. It's just that I have never received it from the trust.
Expert:  Stephen G. replied 1 year ago.
OK, then what this is most likely, now that I know it's related to a farm activity, presuming you aren't a farmer the reason you have two figures with the same code is "I" is because there's an AMT adjustment for both the operations in the Trust's last year and an AMT for the disposition.So the bottom is that you can add the numbers together and enter them on Form 6251 Line 19 for Passive Activities.
Expert:  Stephen G. replied 1 year ago.
Just checking in......................I see you had a chance to review my response on 4/17/2016.Do you have any follow-up questions?If not, I would appreciate it if you would take a moment and rate my response as that is the only way we receive credit for our share of the payment you already made. Otherwise, without a rating, we are not compensated for our efforts on your behalf.Thanks very much,Steve G.