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Screen Deduct - Deductions and Investment Interest (1041)
Deductions
Interest
Enter the amount of interest expense. Use the statement to enter multiple items and classify the deductions. If you don't need to enter special percentages or codes, enter the amount directly on the input screen. The following table describes the columns available in the statement and how they affect the calculation of the federal and state tax returns.
Field | Details |
|---|---|
Income Type | Enter a code to directly allocate the deduction to a particular income type. Leave this field blank to indirectly allocate the expense to all income types. |
Corpus Percent | Enter a percentage if an item is entirely or partially allocable to corpus rather than income. |
Investment Interest | Enter X to transfer the interest amount to Form 4952, line 1. |
Amount | Enter the expense amount. The indirect and direct allocations to tax-exempt income are subtracted from the amounts in this column, and the remaining amount transfers to the applicable line on Form 1041, 1041-QFT, 1040NR, or 5227.
note
The indirect amount allocable to tax-exempt income (nontaxable income, tax-exempt interest, and tax-exempt dividends) calculates on the Allocation of Deductions for Tax-Exempt Income worksheets. |
Election | If you're claiming deductions on both Forms 706 and 1041, or waiving the right to claim expenses on Form 706, enter a code to generate the election. All of the deductions with the same code will be listed in the applicable election. |
Seller financed interest
Enter any seller-financed interest paid. The name, address, Social Security number, and federal amount generate a statement for Form 1041, Page 2, Question 5. The following table describes the columns available in the statement and how they affect the calculation of the federal and state tax returns.
Field | Details |
|---|---|
Income Type | Enter a code to directly allocate the deduction to a particular income type. Leave this field blank to indirectly allocate the expense to all income types. |
Corpus Percent | Enter a percentage if an item is entirely or partially allocable to corpus rather than income. |
Amount | Enter the expense amount. The indirect and direct allocations to tax-exempt income are subtracted from the amounts in this column, and the remaining amount transfers to the applicable line on Form 1041, 1041-QFT, 1040NR, or 5227.
note
The indirect amount allocable to tax-exempt income (nontaxable income, tax-exempt interest, and tax-exempt dividends) calculates on the Allocation of Deductions for Tax-Exempt Income worksheets. |
Election | If you're claiming deductions on both Forms 706 and 1041, or waiving the right to claim expenses on Form 706, enter a code to generate the election. All of the deductions with the same code will be listed in the applicable election. |
Taxes deduction
Use the
Not entered elsewhere
statement to enter any taxes withheld or paid that you haven't entered elsewhere. The tax expense on Form 1041, 1041-QFT, 1040NR, or 5227 includes amounts you enter here as well as:- State-estimated taxes on the StPmt screen with dates in the current year. If you enter the state-estimated tax amount in theTotalfield, 75 percent of the amount is assumed to be deductible in the current year.
- State taxes withheld from interest, dividends, and other income on the Income screen in the Income folder.
- State tax withheld and local tax withheld on the 1099R, W2, or W2G screens in the Income folder.
- State withholding entered in theOther withholdingfield on the PayExt screen in the Payments folder.
- Foreign taxes paid if theReport all foreign tax as a deductionfield is marked on the OthCr screen in the Credits folder.
- State income tax withheldon the K1-3 screen in the K1 1065, 1120S folder.
- Trust paid state estimated taxeson the K1T-2 screen in the K1 1041 folder.
- If the total of all the above items exceeds $10,000, UltraTax CS will include a PL1151-97 Adjustment to reduce the total deduction to $10,000.
If you enter
X
in the Deduct sales taxes instead of state estimates and state withholding
field, state and local estimated taxes and withholding are not part of the deduction for taxes. Enter the sales tax amounts in this statement. If you enter 2
in the Tax Type
field, state returns treat the amount as state and local taxes for adjustment and deduction calculationsThe following table describes the columns available in the statement and how they affect the calculation of the federal and state tax returns.
Field | Details |
|---|---|
Income Type | Enter a code to directly allocate the deduction to a particular income type. Taxes are not allocated to tax-exempt income (nontaxable income, tax-exempt interest, and tax-exempt dividends). To directly allocate taxes to tax-exempt income, enter TE or NON in this field. To indirectly allocate taxes to tax-exempt income, enter X in the Allocate indirect tax expense to all income types field on the Allocate screen in the Allocation folder. |
Tax Type | Enter a code to identify the type of tax. This information is used on the Grantor/Agency Report, Form 1116, and certain state adjustment calculations. |
Corpus Percent | Enter a percentage if an item is entirely or partially allocable to corpus rather than income. |
Amount | Enter the expense amount. The indirect and direct allocations to tax-exempt income are subtracted from the amounts in this column, and the remaining amount transfers to the applicable line on Form 1041, 1041-QFT, 1040NR, or 5227.
note
The indirect amount allocable to tax-exempt income (nontaxable income, tax-exempt interest, and tax-exempt dividends) calculates on the Allocation of Deductions for Tax-Exempt Income worksheets. |
Postal Code | Enter a postal code for the state the tax was from. This information does not appear on the federal return. Certain states use this information to calculate state adjustments. |
Election | If you're claiming deductions on both Forms 706 and 1041, or waiving the right to claim expenses on Form 706, enter a code to generate the election. All of the deductions with the same code will be listed in the applicable election. |
Other deductions
Enter other deductions allowable under section 67(b) that aren't deductible elsewhere.
The following items are added to the statement when printing.
- Form 4684, line 18
- Form 4684, line 32
- Form 4684, line 38b
- Portfolio deductions entered on the K1-2 screen in the K1 1065, 1120S folder
- NOL deduction entered on the Deduct screen in the Deductions folder and K1T-2 screen in the K1 1041 folder
- Penalty for early withdrawal entered in theInterest Incomestatement on the Income screen in the Income folder and the K1-2 screen in the K1 1065, 1120S folder
- Estate tax deductions entered on the K1T screen in the K1 1041 folder
- Depreciation, entered in the Income folder
- The fiduciary share of qualified business income deduction from the Qualified Business Income Deduction Calculation, Line 15.
The following table describes the columns available in the statement and how they affect the calculation of the federal and state tax returns.
Field | Details |
|---|---|
Income Type | Enter a code to directly allocate the deduction to a particular income type. Leave this field blank to indirectly allocate the expense to all income types. |
Corpus Percent | Enter a percentage if an item is entirely or partially allocable to corpus rather than income. |
Admin | Enter X if an item is an administrative expense of the estate or trust. UltraTax CS includes amounts from items marked with X in the calculation of adjusted gross income for purposes of the two-percent floor on miscellaneous deductions, and modified adjusted gross income on Forms 4684 and 8582. |
Amount | Enter the expense amount. The indirect and direct allocations to tax-exempt income are subtracted from the amounts in this column, and the remaining amount transfers to the applicable line on Form 1041, 1041-QFT, 1040NR, or 5227.
note
The indirect amount allocable to tax-exempt income (nontaxable income, tax-exempt interest, and tax-exempt dividends) calculates on the Allocation of Deductions for Tax-Exempt Income worksheets. |
Election | If you're claiming deductions on both Forms 706 and 1041, or waiving the right to claim expenses on Form 706, enter a code to generate the election. All of the deductions with the same code will be listed in the applicable election. |
Miscellaneous deductions (for accounting income)
Due to the Tax Cuts and Jobs Act, miscellaneous deductions are only used for the calculation of accounting income and are no longer a deduction on Form 1041.
Estate tax deduction
Use this statement to enter information about the calculation of the estate tax deduction. If the total amount includes capital gains or qualified dividends received as income in respect to a decedent (IRD), enter that amount in the appropriate column. The amount you enter in the
Capital Gains in IRD
column is subtracted from Schedule D, Part V, line 26. The amount you enter in the Qualified Divs in IRD
column is subtracted from Form 1041, Page 1, line 2b(2).Net operating loss carryback for amended return
Enter net operating loss carryovers from previous years in the NOL Carryovers section of the CO screen in the Carryovers and NOL folder.
Trustee fee charged per contract
If you’re preparing a return for a qualified funeral trust, enter the amount of trustee fees that should be charged per contract. The fee multiplies by the number of owners and includes the total on Form 1041-QFT, line 7.
Form 4952 - Investment Interest Expense
Treat all long-term capital gains and qualified dividends as investment income
If you enter
X
here any amounts in the Amount to include in investment income if not 100%
fields below are disregarded and 100 percent of long-term capital gains and qualified dividends is included in investment income. Qualified dividends included in investment income are not available to distribute to beneficiaries.Investment expenses (Force)
Form 4953, line 5 calculates using amounts from the K1-2 screen and expenses from royalty units of the Rent screen. Enter an amount to override the calculated amount for investment expenses. If the client is an ESBT with non-S Corp income, enter the override for the S Corp part of the trust in the
ESBT / QSST
field and enter the override for the remainder of the trust in the Other
field.