Form 1041 Schedule K-1 - 2005 (Page 3 of 4) in pdf

Schedule K-1 (Form 1041) 2005

Page

Instructions for Beneficiary Filing Form 1040

Note: The fiduciary’s instructions for completing

Schedule K-1 are in the Instructions for Form 1041.

What’s New

Item F

The Schedule K-1 has been substantially revised for the 2005

If the estate or trust is a registration-required tax shelter, it

tax year. The instructions have been updated to reflect the

should have completed item F. See the Instructions for Form

redesign of Schedule K-1, which uses codes to identify many

8271, Investor Reporting of Tax Shelter Registration Number,

of the items reported on the schedule.

to determine your reporting requirements.

Item G

General Instructions

If the estate or trust has invested in a registration-required tax

Purpose of Form

shelter, it must check item G and attach a copy of its Form

8271 to the Schedule K-1. If you claim or report any income,

The fiduciary of a decedent’s estate or trust uses Schedule

loss, deduction, credit, or other tax benefit from a

K-1 to report your share of the estate’s or trust’s income,

registration-required tax shelter, you must also complete and

credits, deductions, etc. Keep it for your records. Do not file it

attach Form 8271 to your tax return. Use the information from

with your tax return. A copy has been filed with the IRS.

the attached Form 8271 to complete your form.

Inconsistent Treatment of Items

Part III—Beneficiary’s Share of Current Year

Generally, you must report items shown on your Schedule K-1

Income, Deductions, Credits, and Other

(and any attached schedules) the same way that the estate or

Items

trust treated the items on its return.

The amounts shown in boxes 1 through 14 reflect your share

If the treatment on your original or amended return is

inconsistent with the estate’s or trust’s treatment, or if the

of income, loss, deductions, credits, etc., from an estate or

estate or trust was required to but has not filed a return, you

trust. For Form 1040 filers, page 2 of Schedule K-1 provides

must file Form 8082, Notice of Inconsistent Treatment or

summarized reporting information. The summarized reporting

Administrative Adjustment Request (AAR), with your original or

information reflects references to forms in use for calendar

year 2005.

amended return to identify and explain any inconsistency (or

to note that an estate or trust return has not been filed).

If you are not an individual, report the amounts in each box

If you are required to file Form 8082 but fail to do so, you

as instructed on your tax return.

may be subject to the accuracy-related penalty. This penalty is

Codes. In box 9 and boxes 11 through 14, the fiduciary will

in addition to any tax that results from making your amount or

identify each item by entering a code in the column to the left

treatment of the item consistent with that shown on the

of the dollar amount entry space. Theses codes are identified

estate’s or trust’s return. Any deficiency that results from

on the page 2 of Schedule K-1.

making the amounts consistent may be assessed

immediately.

Attached statements. The fiduciary will enter an asterisk (*)

after the code, if any, in the column to the left of the dollar

Errors

amount entry space for each item for which it has attached a

statement providing additional information. For those

If you believe the fiduciary has made an error on your

informational items that cannot be reported as a single dollar

Schedule K-1, notify the fiduciary and ask for an amended or

amount, the trust or estate will enter an asterisk in the left

a corrected Schedule K-1. Do not change any items on your

column and write “STMT” in the dollar amount entry space to

copy. Be sure that the fiduciary sends a copy of the amended

indicate the information is provided on an attached statement.

Schedule K-1 to the IRS. If you are unable to reach an

agreement with the fiduciary regarding the inconsistency, you

Boxes 3 and 4a—Net Short-Term and Net

must file Form 8082.

Long-Term Capital Gain

Beneficiaries of Generation-Skipping Trusts

If there is an attachment to this Schedule K-1 reporting a

disposition of a passive activity, see the Instructions for Form

If you received Form 706-GS(D-1), Notification of Distribution

8582, Passive Activity Loss Limitations, for information on the

From a Generation-Skipping Trust, and paid a

treatment of dispositions of interests in a passive activity.

generation-skipping transfer (GST) tax on Form 706-GS(D),

Box 5—Other Portfolio and Nonbusiness Income

Generation-Skipping Transfer Tax Return for Distributions, you

can deduct the GST tax paid on income distributions on

The amount reported in this box is your distributive share of

Schedule A (Form 1040), line 8. To figure the deduction, see

royalties, annuities, and other income that is not subject to the

the Instructions for Form 706-GS(D).

passive activity rules. It also includes income in respect of a

decedent (IRD), which is not included in boxes 1, 2a, 3, 4a, 6,

Specific Instructions

7, or 8.

Part I—Information About the Estate or Trust

Boxes 6 through 8—Ordinary Business Income, Net

Rental Real Estate Income, and Other Rental Income

Item E

The deductions in boxes 6 through 8 may be subject to the

If the box in item E is checked, this is the final year of the

passive loss limitations of Internal Revenue Code section 469,

estate or trust.

which generally limits deductions from passive activities to the

income from those activities. The fiduciary will provide you

Note. If the “Final K-1” box at the top of Schedule K-1 is

with a separate schedule showing your distributive share of

checked, this is the final return for the beneficiary.

Form 1041 Schedule K-1 - 2005 Page 3

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