Instructions For Schedule K-1 (Form 1041) For A Beneficiary Filing Form 1040

is reported on line 8a of Form 1040 and

limits deducting passive losses only from

A short-term capital loss carryover,

Schedule B, Part I, line 1, if applicable.

passive activity income. The rules for

reported as code B, is reported on

applying these limitations to beneficiaries

Schedule D (Form 1040), line 5.

haven't yet been issued. For more details,

Box 2a—Ordinary Dividends

see Pub. 925, Passive Activity and At-Risk

A long-term capital loss carryover,

This box reports the beneficiary’s share of

Rules.

reported as code C, is reported, as

ordinary dividends. This amount is

appropriate, on Schedule D (Form 1040),

reported on line 9a of Form 1040 and

line 12; line 5 of the 28% Rate Gain

Box 9—Directly Apportioned

Schedule B, Part II, line 5, if applicable.

Worksheet for Schedule D, line 18; and

Deductions

line 16 of the Unrecaptured Section 1250

Box 2b—Qualified Dividends

The fiduciary must attach a statement

Gain Worksheet for Schedule D, line 19.

showing depreciation, depletion, and

This box reports the beneficiary’s share of

amortization directly apportioned to you, if

Box 11, Codes D and E—NOL

qualified dividends. This amount is

any, for each activity reported in boxes 5

reported on line 9b of Form 1040.

Carryover

through 8.

Upon termination of a trust or decedent’s

Boxes 3 and 4a—Net Short-Term

Box 10—Estate Tax Deduction

estate, a beneficiary succeeding to its

and Net Long-Term Capital Gain

property is allowed to deduct any unused

(Including Certain

net operating loss (NOL) if the carryover

Net short-term capital gains are reported

Generation-Skipping Transfer

would be allowable to the trust or estate in

on line 5 of Schedule D (Form 1040) and

Taxes)

a later tax year but for the termination. The

net long-term capital gains are reported on

deduction for regular tax purposes,

line 12 of Schedule D (Form 1040).

If an estate or trust distributes income in

reported as code D, is reported on Form

respect of a decedent (IRD) to a

1040, line 21.

If there is an attachment to this

beneficiary, the beneficiary is entitled to

Schedule K-1 reporting a disposition of a

deduct the portion of the estate tax

passive activity, see the Instructions for

A deduction for an Alternative Tax NOL

imposed on the decedent's estate which is

Form 8582, Passive Activity Loss

(ATNOL) carryover for Alternative

attributable to the IRD distributed to the

Minimum Tax (AMT) purposes, reported

Limitations, for information on the

beneficiary. You may claim this amount on

as code E, is reported on Form 6251,

treatment of a disposition of an interest in

line 28 of Schedule A (Form 1040) as a

line 11.

a passive activity.

miscellaneous itemized deduction not

subject to the 2% floor. For an example on

Boxes 4b and 4c—28% Rate Gain

how this amount was computed, see

Box 12—Alternative Minimum Tax

Regulations section 1.691(c)-2 and Pub.

and Unrecaptured Section 1250

Items

559, Survivors, Executors, and

Gain

The information reported in box 12, codes

Administrators.

A through I is used to prepare your Form

A 28% rate gain is reported on line 4 of the

6251. Code A, Adjustment for minimum

28% Rate Gain Worksheet—Line 18 in the

Box 11, Code A—Excess

tax purposes, is the total amount reported

Schedule D (Form 1040) instructions.

Deductions on Termination

on Form 6251, line 15. Codes B through F

represent the portion, if any, of the amount

An unrecaptured section 1250 gain is

If this is the final return of the estate or

included in code A.

reported on line 11 of the Unrecaptured

trust, and there are excess deductions on

Section 1250 Gain Worksheet—Line 19 in

termination, you may deduct the

Codes B through F. If you have an

the Schedule D (Form 1040) instructions.

beneficiary’s share of the excess

amount in box 12 with code B, C, D, E, or

deductions on line 23 of Schedule A (Form

F, see the instructions for lines 37, 38, and

1040) as a miscellaneous itemized

Box 5—Other Portfolio and

39 of Form 6251.

deduction subject to the 2% floor.

Nonbusiness Income

Codes G through I. Include the amount

with any of these codes on the applicable

Excess deductions on termination

The amount reported in this box is your

line of Form 6251.

occur only during the last tax year of the

distributive share of royalties, annuities,

trust or decedent’s estate when the total

and other income that isn't subject to the

Code J. Exclusion items. If you pay

deductions (excluding the charitable

passive activity rules. It also includes

alternative minimum tax in 2017, the

deduction and exemption) are greater

income in respect of a decedent (IRD),

amount in box 12, code J will help you

than the gross income during that tax year.

which isn't included in boxes 1, 2a, 3, 4a,

figure any minimum tax credit for 2018.

Only the beneficiary of an estate or trust

6, 7, or 8.

See the 2018 Form 8801, Credit for Prior

that succeeds to its property is allowed to

Year Minimum Tax—Individuals, Estates,

deduct that entity’s excess deductions on

Boxes 6 through 8—Ordinary

and Trusts, for more information.

termination. A beneficiary who doesn’t

Business Income, Net Rental Real

have enough income in that year to absorb

Box 13—Credits and Credit

Estate Income, and Other Rental

the entire deduction can’t carry the

Recapture

balance over to any succeeding year.

Income

Codes A through Q, and code Z, list all the

The fiduciary will provide you with a

Box 11, Codes B and C—Unused

credits that may be allocated to you as a

separate schedule showing your

beneficiary.

Capital Loss Carryover

distributive share of income from each

trade or business, net rental real estate, or

Upon termination of the trust or

Generally, you must file the source

other rental activity.

decedent’s estate, the beneficiary

credit form along with Form 3800, General

succeeding to the property is allowed to

Business Credit, to claim the general

Any losses reported in boxes 6 through

deduct any unused capital loss carryover

business credits listed on Schedule K-1

8 may be subject to the passive loss

under section 1212.

(Form 1041), codes C through Q and code

limitations of section 469, which generally

2017 Instructions for Schedule K-1 (Form 1041)

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Instructions For Schedule K-1 (Form 1041) For A Beneficiary Filing Form 1040 - 2017 Page 2

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