Question

reporting of proceeds from sale of decedents primary residence to beneficiaries on 1041 K-1 forms

Forum|Forum|2 years ago
February 13, 2024
1 reply
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It is unclear to me if the distribution of non-taxable proceeds from the sale of decedents primary residence gets reported on schedule K-1 of a 1041 tax return. All of the boxes indicate the K-1 is only for reporting of income that the trust makes.

It's a pretty simple trust/1041containing only the proceeds from the sale of the primary resident and some interest income above the $600 exemption.

Can anyone clear this up?

thanks!

M-MTax

Why don't you enter it all in TT Business? The trust is getting an IDD for the income distributed....not the corpus.

W

wtflandersAuthor

I did enter it in and it's not showing up on the K-1's.

D

DianeW777

It's a trust from what @wtflanders said and any loss wouldn't show up on the K-1s unless it was a final return.

It would seem there is little to no gain on the sale since it would have a stepped up basis for the beneficiaries. If it was sold closely to the time of death within a reasonable time frame then the selling price and cost basis would be very close to the same depending on the sales expense.

For the beneficiaries, gain or loss, if none of then loved in the home, would be an investment income and carried as such to the K1s. Check the distributable net income for the trust, it may need to go to the beneficiaries immediately via the K1. Based on your comments it s 'simple trust'.

@wtflanders

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