This section of the Schedule K-1 (Form 1041) is for income items and it does not usually contain losses.
Box 1 – Interest Income
Amounts entered on this line will automatically flow to Line 2b of Form 1040 as Ordinary Interest.
Box 2a – Ordinary Dividends
Amounts entered on this line will automatically flow to Line 3b of Form 1040 as Ordinary Dividends.
Box 2b – Qualified Dividends
Amounts entered on this line will automatically flow to Line 3a of Form 1040 as Qualified Dividends.
Box 3 – Net short-term capital gain
Amounts entered on this line will automatically flow to Schedule D (Form 1040), Line 5.
Box 4a – Net long-term capital gain
Amounts entered on this line will automatically flow to Schedule D (Form 1040), Line 12.
Box 4b – 28% rate gain
Amounts entered on this line will automatically flow to a 28 Rate Gain Worksheet Line 4, and then to Schedule D (Form 1040), Line 18.
Box 4c – Unrecaptured section 1250 gain
Amounts entered on this line will automatically flow to an Unrecaptured Section 1250 Gain Worksheet, Line 11, and then to Schedule D (Form 1040), Line 19.
Box 5 – Other portfolio and nonbusiness income
Amounts entered on this line will automatically flow to Schedule E (Form 1040), Part III, Line 33(f) as nonpassive income from an Estate or Trust.
Box 6 – Ordinary business income
- Amounts entered on this line as passive income will automatically flow to Schedule E (Form 1040), Part III, Line 33(d) unless a passive loss carryover or a passive loss from another activity exists, which may otherwise reduce or eliminate this income.
- Amounts entered as non passive income will flow to Schedule E (Form 1040), Part III, Line 33(f).
Box 7 – Net rental real estate income
- Amounts entered on this line as passive income will automatically flow to Schedule E (Form 1040), Part III, Line 33(d) unless a passive loss carryover or a passive loss from another activity exists, which may otherwise reduce or eliminate this income.
- Amounts entered as non passive income will flow to Schedule E (Form 1040), Part III, Line 33(f).
Box 8 – Other rental income
- Amounts entered on this line as passive income will automatically flow to Schedule E (Form 1040), Part III, Line 33(d) unless a passive loss carryover or a passive loss from another activity exists, which may otherwise reduce or eliminate this income.
- Amounts entered as non passive income will flow to Schedule E (Form 1040), Part III, Line 33(f).
Box 9 - Directly Apportioned Deductions- Not Supported
The fiduciary must attach a statement showing depreciation, depletion, and amortization directly apportioned to you, if any, for each activity reported in boxes 5 through 8.
NOTE: This is a guide on entering the Income items from Schedule K-1 (Form 1041) for a Beneficiary Filing Form 1040 into the tax program. This is not intended as tax advice.