1041 trust with rental

[grandmabee]

trust with a rental.  deprec. is a separately stated item and should go to line 9 of K-1.  But this year for reason it is only taking some of deprec. to K-1 and rest to sch E.  Am I missing a new box or something because I don't think the tax law changed.  They have no depreciation reserve so I think all goes to K-1.  Any one work with this yet.  thanks for any help

[michaelmars]

I assume this is an estate.  Without knowing details it would seem that normal depreciation that was existing basis flows to sch e and the 754 election depreciation is a separately stated item, however, if all the beneficiaries of the trust benefit from the 754 then you can book it as regular depreciation and let it flow to E.

[Terry D EA]

I think we need more information to accurately reply. Is this trust involve partner's or is this an estate using form 1041. Knowing that will determine the form that should be used. Everything I read on the 754 election is referring to "partnerships" and adjusting  partner's basis due to making a 754 election. Just confused and wondering.

[grandmabee]

It is a trust.  Was a revocable then after death became an irrevocable trust.  No 754.

[michaelmars]

sound like the trust changed from simple to complex upon death, more detail needed

[grandmabee]

yes it's a complex.  no different from 2014 to 2015 but won't take the depreciation to K-1 part is going to Schedule E.  Last prior 3 years all was on K-1.  the only thing in the trust is the rental house and is rented to same people so figures are almost exactly the same each year.

 

[jklcpa]

1 hour ago, grandmabee said:

yes it's a complex.  no different from 2014 to 2015 but won't take the depreciation to K-1 part is going to Schedule E.  Last prior 3 years all was on K-1.  the only thing in the trust is the rental house and is rented to same people so figures are almost exactly the same each year.

 

Are these the same assets as in prior years, or were new assets added that aren't flowing to the proper lines. I'm not sure if the input is the same as in prior years, but on the asset entry screen, ATX used to have a line to designate where to carry the current year's depreciation expense to, and it had to be entered for each asset. It was on the asset entry screen, line 10, and input could be chosen to carry the depreciation to line 9 of the K-1.  If these were existing assets, perhaps that input was lost somehow in the rollover. Not sure that helps since I don't have the current program.  Also check to make sure you don't have an entry somewhere in global settings that is overriding the expected flow of data to those lines.

[Terry D EA]

I like Judy don't have the ATX program so I cannot look at the entry. It sounds as though you are using the right process so it would lead to an entry problem. Sometimes, I have to walk away for a while and then come back to the program and then input seems to hit me in the face. Either I am getting old (no doubt), or working too hard when this happens. Wish I could help you more.

[kcjenkins]

I'm with Terry on that point.  If you look at it too long, it's a waste of time.  Sleep on it, and the next day it's often easier to see what was missed.  

 

[JMovichEA]

The program allocates between the trust and the beneficiaries if not all the income has been distributed. Do the distributions equal DNI? Look at the deprecation tab for the 1041 -  it will show the percentages allocated.