2011 Instruction 1041 Schedule K-1

2011Instructions for ScheduleK-1 (Form 1041) for aBeneficiary Filing Form 1040Note. The fiduciary’s instructions for completing Schedule K-1 are in theInstructions for Form 1041.ErrorsDepartment of the TreasuryInternal Revenue ServiceSection references are to the Internalthe dollar amount entry space. TheseRevenue Code unless otherwise noted. If you believe the fiduciary has made ancodes are identified on page 2 oferror on your Schedule K-1, notify the Schedule K-1.What’s Newfiduciary and ask for an amended or aAttached statements. The fiduciary willFuture developments. The IRS has corrected Schedule K-1. Do not changeenter an asterisk (*) after the code, if any,created a page on IRS.gov for information any items on your copy. Be sure that thein the column to the left of the dollarabout Form 1041 and its instructions, at fiduciary sends a copy of the amendedamount entry space for each item forwww.irs.gov/form1041. Information about Schedule K-1 to the IRS. If you arewhich it has attached a statementany future developments affecting Form unable to reach an agreement with theproviding additional information. For those1041 (such as legislation enacted after fiduciary regarding the inconsistency, youwe release it) will be posted on that page.informational items that cannot bemust file Form 8082.reported as a single dollar amount, theTax rates. For tax years 2011 and 2012,Beneficiaries ofestate or trust will enter an asterisk in thePublic Law 111-312 extended the lowerGeneration-Skipping Trusts left column and write “STMT” in the dollartax rates for capital gains and qualifiedamount entry space to indicate thedividends.If you received Form 706-GS(D-1),information is provided on an attachedNotification of Distribution From astatement.ReminderGeneration-Skipping Trust, and paid aIf Schedule K-1 shows backupgeneration-skipping transfer (GST) tax onForm 706-GS(D), Generation-SkippingBoxes 3 and 4a—Net Short-Termwithholding in box 13, code B, attach aTransfer Tax Return for Distributions, you and Net Long-Term Capital Gaincopy to your return.can deduct the GST tax paid on income If there is an attachment to this Scheduledistributions on Schedule A (Form 1040), K-1 reporting a disposition of a passiveGeneral Instructionsline 8. To figure the deduction, see the activity, see the Instructions for FormInstructions for Form 706-GS(D).8582, Passive Activity Loss Limitations,Purpose of Formfor information on the treatment of aUse Schedule K-1 to report your share ofSpecific Instructionsdisposition of an interest in a passivethe estate’s or trust’s income, credits,activity.deductions, etc. Keep it for your records.Part I—Information About theDo not file it with your tax return, unlessEstate or TrustBox 5—Other Portfolio andbackup withholding was reported in boxNonbusiness Income13, code B.Item EThe amount reported in this box is yourInconsistent Treatment of Items If the item E box is checked, this is the distributive share of royalties, annuities,Generally, you must report items shown final year of the estate or trust.and other income that is not subject to theon your Schedule K-1 (including attached Note. If the “Final K-1” box at the top ofpassive activity rules. It also includesschedules) the same way that the estate Schedule K-1 is checked, this is the finalincome in respect of a decedent (IRD),or trust treated the items on its return. return for the beneficiary.which is not included in boxes 1, 2a, 3,If the treatment of an item on your4a, 6, 7, or 8.original or amended return is inconsistent Part III—Beneficiary’s Share ofwith the estate’s or trust’s treatment (or if Current Year Income,Boxes 6 through 8—Ordinarythe estate or trust was required to but has Deductions, Credits, and Other Business Income, Net Rental Realnot filed a return), you must file Form ItemsEstate Income, and Other Rental8082, Notice of Inconsistent Treatment orIncomeAdministrative Adjustment RequestThe amounts shown in boxes 1 through14 reflect your share of income, loss, The deductions in boxes 6 through 8 may(AAR), with your original or amendeddeductions, credits, etc., from an estate or be subject to the passive loss limitationsreturn to identify and explain anytrust. For Form 1040 filers, page 2 of of Internal Revenue Code section 469,inconsistency (or to note that an estate orSchedule K-1 provides summarized which generally limits deductions fromtrust return has not been filed).reporting information. The summarized passive activities to the income fromIf you are required to file Form 8082 reporting information reflects references those activities. The fiduciary will providebut fail to do so, you may be subject to to forms in use for calendar year 2011. you with a separate schedule showingthe accuracy-related penalty. This penaltyyour distributive share of income fromis in addition to any tax that results from If you are not an individual, report the each trade or business, net rental realmaking your amount or treatment of the amounts in each box as instructed on estate, or other rental activity. The rulesitem consistent with that shown on the your tax return.for applying these limitations toestate’s or trust’s return. Any deficiency Codes. In box 9 and boxes 11 through beneficiaries have not yet been issued.that results from making the amounts 14, the fiduciary will identify each item by For more details, see Pub. 925, Passiveconsistent may be assessed immediately. entering a code in the column to the left of Activity and At-Risk Rules.Jan 23, 2012Cat. No. 11374Z

Box 9—Directly Apportioned Note. Form 1041-T, Allocation ofDeductionsEstimated Tax Payments to Beneficiaries,The fiduciary must attach a statementmust be timely filed by the fiduciary forshowing depreciation, depletion, andthe beneficiary to get the credit for anamortization directly apportioned to you, ifestimated tax payment.any, for each activity reported in boxes 5 Code B. Credit for backup withholding.through 8.Include this amount on line 62 of yourForm 1040 and attach a copy of ScheduleBox 12—Alternative Minimum TaxK-1 (Form 1041) to your return.ItemsCode C. Low-income housing credit.The information reported in box 12, codes The fiduciary will provide you with aA through I is used to prepare your Form statement showing the amount to report6251, Alternative Minimum on lines 4 and 11 of Form 8586,Tax—Individuals. Code A, Adjustment for Low-Income Housing Credit. If your onlyminimum tax purposes, is the total source for the credit is a pass-throughamount reported on Form 6251, line 15. entity, such as an estate or trust, you canCodes B through F represent the portion, report the amounts from line 4 and 11 ofif any, of the amount included in code A. Form 8586 directly on Form 3800, Part III,Codes B through F. If you have an lines 1d and 4d, respectively.amount in box 12 with code B, C, D, E, or Code D. Rehabilitation credit andF, see the instructions for lines 37, 38, energy credit. The fiduciary must giveand 39 of Form 6251.you a statement that shows theCodes G through I. Include the amount information you will need and where towith any of these codes on the applicable enter it on Form 3468, Investment Credit,line of Form 6251.so that you can figure the amount of anyCode J. Exclusion items. If you pay rehabilitation credit and energy credit thatalternative minimum tax in 2011, the you may claim.amount in box 12, code J will help you Code E. Other qualifying investmentfigure any minimum tax credit for 2012. credit. This code is used to report theSee the 2012 Form 8801, Credit for Prior qualified investment for figuring theYear Minimum Tax—Individuals, Estates, qualifying advanced coal project credit,and Trusts, for more information.the qualifying gasification project credit,Box 13—Credits and Creditthe qualifying advanced energy projectcredit, and the qualifying therapeuticRecapturediscovery project credit. The fiduciaryCodes A through T list all the credits that must provide you with a statement thatmay be allocated to you as a beneficiary. shows the information you will need andGenerally, you must file the source where to report it on Form 3468 so thatcredit form along with Form 3800 to claim you can figure the amount of thethe general business credits listed on previously listed credits that you maySchedule K-1(Form 1041), codes C claim.through T. However, if your only source Code H. Alcohol and cellulosic biofuelfor the credits listed on Form 3800, Part fuels credit. If this credit includes theIII is from pass-through entities, you may small ethanol producer credit, thenot be required to complete the source fiduciary will provide additionalcredit form. Instead, you may be able to information on an attached statement. If areport the credit directly on Form 3800. statement is attached, see theSee below for the instructions for specific instructions for line 10 of Form 6478,credits.Alcohol and Cellulosic Biofuel FuelsCode A. Credit for estimated taxes. Credit. Otherwise, report this amount onThe beneficiary treats this amount as a Form 3800, Part III, line 4c.payment of estimated tax. To figure any Code J. Renewable electricity, refinedunderpayment and penalty on Form 2210, coal, and Indian coal production credit.Underpayment of Estimated Tax by Complete Form 8835, RenewableIndividuals, Estates, and Trusts, treat the Electricity, Refined Coal, and Indian Coalamount entered in box 13, code A, as an Production Credit, to figure the amount ofestimated tax payment made on January your credit. The fiduciary must provide17, 2012.you with a statement showing the amountof credit to report on line 9 in Part I, andhow much to report on line 29 in Part II ofForm 8835. If your only source for thecredit is a pass-through entity and thecredit is reported only on line 9 in Part I ofForm 8835, you can enter that amountdirectly on Form 3800, Part III, line 1f.Otherwise, complete Form 8835 asdirected.Code O. Biodiesel and renewablediesel fuels credit. If this credit includesthe small agri-biodiesel producer credit,the fiduciary will provide additionalinformation on an attached statement. Ifno statement is attached, report thisamount on line 9 of Form 8864, Biodieseland Renewable Diesel Fuels Credit. If astatement is attached, see theinstructions for Form 8864, line 11.Code U. Recapture of credits. If youare required to recapture any credits, thefiduciary will provide a statement with theinformation you need to figure your creditrecapture.Box 14—Other InformationCode C. Qualified productions activitiesincome. If any of the income is oil-relatedqualified production activities income, thefiduciary must give you a statement thatshows the amount. Enter the oil-relatedamount on Form 8903, line 7, col. (a).Enter the amount from all activities onForm 8903, line 7, col. (b).Code F. Gross farming and fishingincome. The amount of farming andfishing income is included in box 6. Thisincome is separately stated to helpdetermine if you are subject to a penaltyfor underpayment of estimated tax.Report the amount of gross farming andfishing income on Schedule E (Form1040), line 42.Code H. Other information. If this codeis used, the fiduciary will provide you withany additional information you may needto file your return that is not shownelsewhere on this Schedule K-1.If you receive a statement regardingthe splitting of foreign tax credits from theincome to which it relates, section 909may prevent you from deducting theforeign tax credit until the related foreignincome is taken into account. See Form1116 and Pub. 514 for more information.-2- 2011 Instructions for Schedule K-1 (Form 1041)