Schedule K-1 question

[neilbrink]

I have a client with a Trust K-1 that shows an amount at line 14-F as the only income on the form. This line indicates that the income is coming from Farming, and that amount is transferred to the correct line on Schedule E, line 42, but it does not show that income on the 1040 itself. Shouldn't that amount of income also be showing on line 6 (Ordinary Income)of the K-1? A member of the family completed this trust, and I am not sure he knew exactly what he was doing. Thanks. Neil

[neilbrink]

I would like to run this by again to see if anyone has a response.

Thanks

Neil

[Cathy]

I have a client with a Trust K-1 that shows an amount at line 14-F as the only income on the form. This line indicates that the income is coming from Farming, and that amount is transferred to the correct line on Schedule E, line 42, but it does not show that income on the 1040 itself. Shouldn't that amount of income also be showing on line 6 (Ordinary Income)of the K-1? A member of the family completed this trust, and I am not sure he knew exactly what he was doing. Thanks. Neil

Neil,

Line 14F on the K-1 isn't income that would flow to the 1040. It's an "information" figure instead.

Cathy

[neilbrink]

Neil,

Line 14F on the K-1 isn't income that would flow to the 1040. It's an "information" figure instead.

Cathy

Thank you, Cathy

That is my understanding also. So if this was income that WAS supposed to flow to the 1040 Return, should it not have also been entered on Line 6 of the K-1? This "information" was based on income that I assume should have shown up on the K-1 somewhere.

[Margaret CPA in OH]

That is strange, isn't it? Out of curiousity, I clicked on a K-1 entry for 1041 and it says it transfer to, as you probably know, Sch. E, Ln 42 & Sch. SE, Opt Wkst. So I checked the instructions for Sch. E, Ln. 42 and it just says something about not being charged a penalty for underpayment of estimated tax if... Do you think is should go to a Sch F? It does seem strange if it is information only that Sch SE might be involved and the filer wouldn't be charged an underpayment penalty. Hmmmmm....

[jainen]

>>I would like to run this by again to see if anyone has a response.<<

In my opinion, you will never find an answer to this. The K-1 is wrong.