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Federal input screens

Beneficiary Information > Federal tab

If the allocation fields are blank for all beneficiaries, the income types are allocated equally among all first tier beneficiaries for simple trusts, grantor trusts, agency relationships, and all final returns. If this is the desired outcome, use the
First tier beneficiaries: Allocate all items, except capital gains, equally
 field on the Allocate Screen to improve processing speed.

Allocations group box

Required amounts and percentages are applicable to first tier beneficiaries, while discretionary amounts and percentages are applicable to second tier beneficiaries. For estates and complex trusts, a beneficiary may be both first and second tier.
Use these fields to allocate all ordinary (non-capital) income types net of deductions using a single set of amounts and percentages. When you enter both amounts and percentages for estates and non-grantor trusts, the amounts allocate first and then the percentages are applied to the remaining balance.
Required amounts and percentages are applicable to first tier beneficiaries, while discretionary amounts and percentages are applicable to second tier beneficiaries. For estates and complex trusts, a beneficiary may be both first and second tier.
Use these fields to allocate all capital gains net of deductions using a single set of amounts and percentages. When you enter both amounts and percentages for estates and non-grantor trusts, the amounts allocate first and then the percentages are applied to the remaining balance.

Other Allocations group box

Enter a percentage to directly allocate depreciation and amortization to the beneficiary. The calculated amounts from these entries report on the beneficiary’s Schedule K-1, box 9, instead of Schedules C, E, and F and Form 4562.
Enter a percentage to directly allocate depletion to the beneficiary on Schedule K-1, box 9, instead of Schedule C or E.
Enter the beneficiary’s percentage of any current-year business or foreign credits and the estate tax deduction. If you leave these fields blank and have not marked the
First tier beneficiaries: Allocate all items, except capital gains, equally
 field on the Allocate Screen, the following will happen.
  • For non-final returns of estates and complex trusts, 100 percent allocates to the fiduciary.
  • For final returns and simple trusts, the following allocations occur.
    • 100 percent of the current-year credit allocates to the beneficiaries.
    • If you do not want 100 percent of the current–year credit allocated to the beneficiaries, mark the
      Final return or simple trust: Allocate credits, estate taxes, or state withholding between trust and beneficiaries
       field on Allocate Screen and enter percentages in the fields on this tab for each beneficiary. To allocate 100 percent to the fiduciary, leave the percent fields blank.
  • For grantor trusts and agency relationships, 100 percent of the credit always allocates to the beneficiaries.
The amount entered here allocates in the
Section 3406 backup withholding allocated to beneficiaries
 field on the Allocate Screen up to the amount of withholding entered in the following locations:
  • Statement dialog for the
    Interest income
    ,
    Dividends
    ,
    Other income
    , or
    Capital gains or (losses)
     field on the Income Screen
  • Statement dialog for the
    Interest income
    ,
    Dividends
    , or
    Capital gains or (losses)
     field on Screen Broker.
  • Statement dialog for the
    Other withholding
     field on the PayExt Screen
  • Federal tax withheld
     field on the 1099M, 1099R, W2, and W2G Screens
  • Federal income tax withheld
     field on the K1-3 Screen
To produce the Beneficiary’s Oil / Gas Summary Schedule, enter a percentage to indicate what portion of the information on the Oil / Gas Well Schedule should be reported to the beneficiary.

Other Returns group box

If you do not wish to use this field, you can also force the total annuity income received by all beneficiaries on the SIT Screen. The amount you enter on the SIT Screen divides equally among the beneficiaries, and nothing happens with the amount you enter in this field.
If you are preparing a return for a pooled income fund and an option has been entered in the
Pooled income funds: Allocate based on ownership share
 field on the Allocate Screen, enter the beneficiary’s share of ownership. 100 percent of the income allocates based on this owner’s share divided by the sum of all owners' shares.

Other buttons

Select this button to open the Special Allocations dialog to specially allocate net income items for the beneficiary.
Select this button to open the Partial Grantor dialog to complete the Grantor / Agency Report for partial grantor trusts for the beneficiary.
This button is only available for grantor trust returns.

This article applies to:

  • Product: UltraTax CS
  • Return type: 1041 Fiduciary
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