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Enter K-1 Line Items from an S Corporation on Your Form 1041: Income Tax Return for Estates and Trusts

Updated: 3/26/2012
Article ID: GEN12133

If you have received a K-1 from an S Corporation (1120S), 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 2094.

Follow these steps first for all of the below income categories and then proceed with the instructions for each specific income item:

  1. Enter required information in the General Info tab.
  2. When you come to "Your Income" screen, scroll down to Income Reported on Schedule K-1, K-1s Received, click Edit.
  3. Check off the type of K-1 received (Partnership or LLC Form 1065, S Corp Form 1120S, Estates or Trusts Form 1041).
  4. Proceed with the instructions below for each specific topic.

S Corporation
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. Go to View (upper left), Click Forms, Click on the Add or View Form tab.
  2. Type "sch" in the Type a Form Window,  Highlight Schedule E, p 2: Supplemental Income & Loss and Click Add Form.
  3. Scroll to Line 28 and enter the applicable information in columns (a) through (j).
Line 4 Interest Income, Line 5a Ordinary Dividends, Line 5b Qualified Dividends and Line 16 Code A Tax-exempt Interest Income
  1. Go to View (upper left), Click Forms, Click on the Add or View Form tab.
  2. Type "interest" in the Type a Form Window.  Highlight the Interest and Dividend Income Worksheet and Click Add Form.
  3. Enter appropriate information.
Line 6 Royalties
  1. Go to View (upper left), Click Forms, Click on the Add or View Form tab.
  2. Type "sch" in the Type a Form Window.  Highlight Schedule E, p 1: Supplemental Income & Loss and Click Add Form. 
  3. Enter appropriate information.
Line 7 Net Short-Term Capital Gain (Loss)
  1. Go to View (upper left), Click Forms, Click on the Add or View Form tab.
  2. Type "sch" in the Type a Form Window.  Highlight Schedule D: Capital Gains and Losses and Click Add Form.
  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 S Corporation name(s) and amount(s), and then select Close to return to Schedule D.
  6. Select the Back to Interview link at the bottom right of the page.

Line 8a Net Long-Term Capital Gain (Loss)
  1. Go to View (upper left), Click Forms, Click on the Add or View Form tab.
  2. Type "sch" in the Type a Form Window.  Highlight Schedule D: Capital Gains and Losses and Click Add Form.
  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 S Corporation name(s) and amount(s), and then select Close to return to Schedule D.
  6. Select the Back to Interview link at the bottom right of the page.

Line 8b Collectibles (28%) Gain (Loss)
  1. Go to View (upper left), Click Forms, Click on the Add or View Form tab.
  2. Type "sch" in the Type a Form Window. Highlight Schedule D: Capital Gains and Losses and click Add Form.
  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 S Corporation description(s) and amount(s). Select Close to exit.
  6. Select the Back to Interview link at the bottom right of the page.

Line 8c Unrecaptured Section 1250 Gain


 
  1. Go to View (upper left), Click Forms, Click on the Add or View Form tab.
  2. Type "sch" in the Type a Form Window.  Highlight Schedule D: Capital Gains and Losses and click Add Form.
  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 S Corporation description(s) and amount(s). Select Close to exit.
  6. Select the Back to Interview link at the bottom right of the page.

Line 9 Net Section 1231 Gain (Loss)
  1. Go to View (upper left), Click Forms, Click on the Add or View Form tab.
  2. Type "sch" in the Type a Form Window.  Highlight Form 4797, p1: Sales of Business Property and click Add Form.
  3. Scroll to the Passthrough Entity section.
  4. Enter the S Corporation 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 bottom right of the page.

Line 11 Section 179 Deduction

 Trusts are not eligible for Section 179. Ignore this number on the K-1.

Line 12 Other Contributions
  1. Go to View (upper left), Click Forms, Click on the Add or View Form tab.
  2. Type "Form" in the Type a Form Window. Highlight Form 1041, p 1-2: US Income Tax Return for Estates and click Add Form.
  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 S Corporation name(s) and amount(s), and then select Close to return to Form 1041.
  6. Select the Back to Interview link at the bottom right of the page.
Line 15 Alternative
Minimum Tax (AMT) Items  
  1. Go to View (upper left), Click Forms, Click on the Add or View Form tab. 
  2. Type "Form" in the Type a Form Window. Highlight Form 1041, p 3-4: US Income Tax Return for Estates and click Add Form.
  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 S Corporation 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 bottom right of the page.
 

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