ANOTHER TAX QUESTION

[antelopedundee]

My wife is the trustee of a trust. The trust owns farm land which is leased out and provides the lion's share of the income. The tax returns for the trust are done by another firm and all we get is a K-1 for any profits that were realized. That income is normally entered on Schedule 1 part I line 5, which also requires schedule E. When I do our tax returns online through one of the services and enter the K-1 income it starts asking all kinds of nosy questions that IMO are irrelevant as if I'm generating the K-1, and it's a royal PITA to work through it. Also no way that I see to just skip it.

Would it be any big deal to report the income on line z with the notation that it's K-1 and with EIN? IMO as long as it gets reported it shouldn't matter. I don't think it would be taxed at trust tax rates either way.

 

[Kimber7man]

Hmm. I would ask the firm that does the tax returns, they should be able to give you guidance.

 

[Rack Daniels]

Taxation without representation is theft.

Unfortunately, I have nothing useful to add beyond that, because that stuff flies over A LOT of peoples heads including mine. With legal repercussions/penalties possible, I would look for representation.

 

[npaden]

My wife is the trustee of a trust. The trust owns farm land which is leased out and provides the lion's share of the income. The tax returns for the trust are done by another firm and all we get is a K-1 for any profits that were realized. That income is normally entered on Schedule 1 part I line 5, which also requires schedule E. When I do our tax returns online through one of the services and enter the K-1 income it starts asking all kinds of nosy questions that IMO are irrelevant as if I'm generating the K-1, and it's a royal PITA to work through it. Also no way that I see to just skip it.

Would it be any big deal to report the income on line z with the notation that it's K-1 and with EIN? IMO as long as it gets reported it shouldn't matter. I don't think it would be taxed at trust tax rates either way.

What tax software are you using? Generally I would just expect you to enter the information provided on the K-1. Most of the software I’ve used has the box numbers of the K-1 that you just enter it in. There are probably some questions about whether it is something you are actively involved with or not to determine if it is passive income or not which determines the deductibility of losses and some fun stuff like that.

 

[Khunter]

The K1’s I enter on our returns are pretty simple to enter. Just enter the data on the K1 and done. Not sure what OP is encountering.

 

[antelopedundee]

What tax software are you using? Generally I would just expect you to enter the information provided on the K-1. Most of the software I’ve used has the box numbers of the K-1 that you just enter it in. There are probably some questions about whether it is something you are actively involved with or not to determine if it is passive income or not which determines the deductibility of losses and some fun stuff like that.

Last year it was freetaxusa. Possibly I'm not doing it quite right, but I will ask their CS before I start. The outfit doing the taxes has already determined all of that. The software acts like I'm generating the K-1. IIRC putting it on Schedle 1 triggers the software to add Schedule.

 

[antelopedundee]

The K1’s I enter on our returns are pretty simple to enter. Just enter the data on the K1 and done. Not sure what OP is encountering.

What software do you use and how do you enter it? I don't think I can go back to last year's return and do anything by starting frrom the beginning.