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Allocation

Allocate income to beneficiaries

  1. Enter income and deductions on the input screens.
  2. Select
    View
    , then
    Beneficiary Information
    .
  3. On the
    Beneficiary
     tab, enter the beneficiary name, address, and identification number.
  4. If you need to enter more beneficiaries, select
    Beneficiary
    , then
    Add
    .
  5. Choose how to allocate the income:
    • Allocate equally among first-tier beneficiaries:
      note
      For a simple trust, grantor trust, agency relationship, or final return, take no further steps. The application's default is equal allocation.
      1. Select the
        Allocation
         folder, then select the
        Allocate
         tab.
      2. Mark the
        First tier beneficiaries: Allocate all items, except capital gains, equally
         checkbox.
      3. To also allocate capital gains equally, mark the
        First tier beneficiaries: Allocate capital gains equally
         checkbox.
    • Don't allocate income to any beneficiaries:
      • If this isn't a final return and there's a default allocation:
        1. Select the
          Allocation
           folder, then the
          Dist
           tab.
        2. Enter
          0
           (zero) in
          Income required to be distributed (Force)
          .
      • For a final return:
        1. Select the
          Allocation
           folder.
        2. In the Beneficiary Allocation Options section, mark the
          Allocate no income or excess deductions to beneficiaries on final return
          checkbox.
        note
        If there's no allocation, the application prints "NO TAXABLE INCOME" on a Schedule K-1 for each beneficiary, unless you've suppressed Schedule K-1 by going to
        View
        , then
        Beneficiary Information
        .
    • Allocate net income using percentages:
      1. Select
        View
        ,
        Beneficiary Information
        , then the 1st beneficiary.
      2. In the Allocations group box on the
        Federal
         tab, use 1 of the following methods to enter the percentage:
        • Use
          Income distributions
           to enter a percentage in the
          Percent
           column.
        • Select
          Special Allocations
           and enter percentages in the
          Percent
           column next to the income type.
      3. Repeat for the other beneficiaries.
      note
      • If the total percentages are greater than 100 for an income type, a diagnostic message prints indicating that the allocation for the income type is equal, proportionate, or not allocated based on the return type.
      • If an income type (for example, interest) is allocated differently from income distributions, the application completely removes it from the income allocation. You'll need to allocate that income specially for beneficiaries that receive distributions of that type.
    • Allocate net income using amounts:
      1. Select
        View
        ,
        Beneficiary Information
        , then the 1st beneficiary.
      2. In the Allocations group box, on the
        Federal
         tab, use 1 of the following methods to enter an amount:
        • Enter an amount in the
          Amount
           column of the
          Income distributions
        • Select
          Special Allocations
           and enter amounts in the
          Amount
           column next to the income type.
      3. Repeat for the other beneficiaries
      note
      • If the sum of
        Income distributions
         on the
        Federal
         tab for all beneficiaries exceeds the total distributable amount available, each beneficiary will receive a proportional allocation of the amount pro-rated among the income types.
      • If the sum of amounts for any income type in
        Special Allocations
         for all beneficiaries exceeds the net amount available for that income type, that amount allocates then rounds down to the total amount available in all income categories. This rounding may cause unexpected amounts to print for all income types on Schedule K-1. Refer to the Allocation of Expenses by Income Type Worksheets to determine the net amounts available.
    • Allocate amounts to a deceased beneficiary and the remaining items by percent to the other beneficiaries.
      1. Select
        View
        ,
        Beneficiary Information
        , then the deceased beneficiary.
      2. Select
        Special Allocations
         on the
        Federal
         tab.
      3. Enter amounts of interest, rental, or capital gain for the deceased beneficiary.
        tip
        Don't enter net income amounts in excess of the amounts available for allocation. Refer to the Allocation of Expenses by Income Type Worksheets to determine the net amounts available.
      4. Select a remaining beneficiary in the
        Beneficiary Name
         list.
      5. Select
        Special Allocations
         on the
        Federal
         tab.
      6. Enter the percentage on the same income type lines that you allocated to the deceased beneficiary (such as interest and rental).
      7. Repeat for the other beneficiaries.
      note
      When you allocate by amount, don't enter more than the net income available for each income type. If you enter a greater amount, that amount allocates then rounds down to the total amount available in all income categories. This can cause unexpected amounts to print on Schedule K-1.
    • Allocate capital losses to a beneficiary:
      • Select the
        Allocation
         folder, then the
        Allocate
         tab.
      • If this isn't a final return, mark the
        Allocate capital losses to beneficiaries on non-final return
         checkbox in the Beneficiary Allocation Options section.
      • Select
        View
        , then
        Beneficiary Information
        .
      • Select the
        Federal
         tab for the 1st beneficiary who will receive an allocation.
      • In the Allocations group box, enter percentages in
        Short-term capital gains
         and
        Long-term capital gains
         to allocate the capital losses.
      note
      • You can't use amounts to allocate capital losses.
      • According to the IRS instructions, capital losses are reported as positive amounts on Schedule K-1, Box 11, not as negative amounts on Box 3 or 4.
    • Allocate federal tax withheld to a beneficiary.
    • Allocate estimated tax payments to a beneficiary.

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