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Enter K-1 Line Items from a Partnership on Your Form 1041: Income Tax Return for Estates and Trusts

Updated: 1/05/2011
Article ID: GEN12135

If you have received a K-1 from a Partnership, it can be a little tricky finding where to enter all of the information on your Form 1041: Income Tax Return for Estates and Trusts.

See the table below to learn where to enter the most common K-1 line items in TurboTax Business. If you have line items that are not addressed below, please contact us and reference article number 2092.

Partnership K-1 Line

To enter in TurboTax Form 1041: Income Estates and Trusts Tax Return...
Line 1 Ordinary Business Income (Loss),
Line 2 Net Rental Real Estate Income (Loss) and
Line 3 Other Net Rental Income (Loss)
  1. Select Open a Form from the Forms menu at the top of the screen.
  2. Highlight Schedule E, p 2: Supplemental Income & Loss and select Open.
  3. Scroll to Line 28 and enter the applicable information in columns (a) through (j).
Line 4 Guaranteed Payments


  1. Select Open a Form from the Forms menu at the top of the screen.
  2. Highlight Form 1041 p 1-2: US Income Tax Return for Estates and click Open.
  3. Scroll to Line 8 Other Income. Click on the line and type "Guaranteed Payments ".
  4. Click on the line in the amount column, and then click on the pad to open Supporting Details.
  5. Enter the partnership name and guaranteed payment amount.
  6. Select Close to exit and return to Form 1041.
  7. Select the Back to Interview link at the top right of the page.
Line 5 Interest,
Line 6a Ordinary Dividends,
Line 6b Qualified Dividends and
Line 18 Tax-Exempt Income and Nondeductible Expenses
  1. Select Open a Form from the Forms menu at the top of the screen.
  2. Interest and Dividend Income Worksheet and select Open.
  3. Enter appropriate information.
Line 7 Royalties
  1. Select Open a Form from the Forms menu at the top of the screen.
  2. Highlight Schedule E, p 1: Supplemental Income & Loss and select Open.
  3. Enter appropriate information.
Line 8 Net Short-Term Capital Gain (Loss)
  1. Select Open a Form from the Forms menu at the top of the screen.
  2. Highlight Schedule D: Capital Gains and Losses and click Open.
  3. Scroll to Line 3 of Part I.
  4. Click on the line in the amount column, and then click on the pad to open Supporting Details.
  5. Enter partnership name(s) and amount(s), and then select Close to return to Schedule D.
  6. Select the Back to Interview link at the top right of the page.

Line 9a Net Long-Term Capital Gain (Loss)
  1. Select Open a Form from the Forms menu at the top of the screen.
  2. Highlight Schedule D: Capital Gains and Losses and click Open.
  3. Scroll to Line 8 of Part II.
  4. Click on the line in the amount column, and then click on the pad to open Supporting Details.
  5. Enter partnership name(s) and amount(s), and then select Close to return to Schedule D.
  6. Select the Back to Interview link at the top right of the page.

Line 9b Collectibles (28%) Gain (Loss)
  1. Select Open a Form from the Forms menu at the top of the screen.
  2. Highlight Schedule D: Capital Gains and Losses and click Open.
  3. Scroll to Line 14c of Part III.
  4. Allocate gain (loss) between Beneficiaries' (Column 1) and Estate's or Trust's (Column 2) in accordance with the trust document.
  5. In each column, click on the line, and then click on the pad to open Supporting Details. Submit partnership description(s) and amount(s). Select Close to exit.
  6. Select the Back to Interview link at the top right of the page.

Line 9c Unrecaptured Section 1250 Gain
  1. Select Open a Form from the Forms menu at the top of the screen.
  2. Highlight Schedule D: Capital Gains and Losses and click Open.
  3. Scroll to Line 14b of Part III.
  4. Allocate gain (loss) between Beneficiaries' (Column 1) and Estate's or Trust's (Column 2) in accordance with the trust document.
  5. In each column, click on the line, and then click on the pad to open Supporting Details. Submit partnership description(s) and amount(s). Select Close to exit.
  6. Select the Back to Interview link at the top right of the page.

Line 10 Net Section 1231 Gain (Loss)

 
  1. Select Open a Form from the Forms menu at the top of the screen.
  2. Highlight Form 4797, p1: Sales of Business Property and click Open.
  3. Scroll to the Passthrough Entity section.
  4. Enter the partnership name(s) and Section 1231 Gain (Loss) amount(s).
    Note: Click on a line in the Section 1231 Gain (Loss) column, and then click on the pad to open Supporting Details. Submit description(s) and amount(s). Select Close to exit. Form 4797 will display the sum of the values submitted on the Supporting Details form.
  5. Select the Back to Interview link at the top right of the page.
Line 12 Section 179 deduction
 Trusts are not eligible for Section 179. Ignore this number on the K-1.
Line 13 Other Contributions
  1. Select Open a Form from the Forms menu at the top of the screen.
  2. Highlight Form 1041, p 1-2: US Income Tax Return for Estates and click Open.
  3. Scroll to Line 1 of the Schedule A section.
  4. Click on the line in the amount column, and then click on the pad to open Supporting Details.
  5. Enter partnership name(s) and amount(s), and then select Close to return to Form 1041.
  6. Select the Back to Interview link at the top right of the page.
Line 17 Alternative
Minimum Tax (AMT) Items
  1. Select Open a Form from the Forms menu at the top of the screen.
  2. Highlight Form 1041, p 3-4: US Income Tax Return for Estates and click Open.
  3. Enter the information in the appropriate section of Schedule 1, Part 1.
    Note: Click on the line in the amount column, and then click on the pad to open Supporting Details. Enter partnership name(s), type and description of AMT adjustment(s), and amount(s). Select Close to return to Form 1041.
  4. Select the Back to Interview link at the top right of the page.
Line 18A Tax-Exempt Interest Income
  1. Select Show My Return from the Forms menu at the top of the screen.
  2. Highlight Interest and Dividend Income Worksheet, and select Open.
  3. Enter the Payer's Name and Total Interest Income in Part I.
  4. Click on the corresponding line in the Type column, and select the type of interest from the drop-down menu.
  5. Enter the State ID.
  6. Select the Back to Interview link at the top right of the page.
Line 18B Other Tax-Exempt Income Amounts reported on Line 18B are nondeductible expenses that do not impact taxable income. Therefore, they do not need to be entered on your return.
Line 19 Distributions Distributions do not impact taxable income on your return and do not have an entry field.
Line 20A Investment Income TurboTax automatically calculates Investment Income based on your entries for Lines 1 - 11 of the Schedule K-1. No additional entries are necessary.

Line 20B Investment Expenses
  1. Select the Deductions tab at the top of the TurboTax screen, and then select the Operating sub-tab.
  2. Enter the amounts on the Investment Interest Expense screen.
  3. Select Continue to proceed through and complete this section of the TurboTax Interview.
 
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