An estate or trust required to file Form 1041 might pass certain items of income and deductions to its beneficiaries. So, if you’re a beneficiary, you must pay tax on your share of income. However, you can also claim credits and deductions on that income.
The estate or trust will send you a Schedule K-1 showing what you must report on your return. The K-1 can include:
- Investment income, like interest, dividends, and capital gains
- Passive income, like rental income
- Deductions to reduce your taxable income
- Credits to reduce your tax
How you report the income depends upon the type of income you’re reporting.
Most Forms 1099-G are received for unemployment compensation or from state or local income tax refunds. Learn more from the tax experts at H&R Block.
Need help deciding if you need to file an amended return (IRS Form 1040X)? Get the facts from the tax experts at H&R Block.
Learn more about your options to reduce or remove an IRS estimated tax penalty. Get the facts from the tax experts at H&R Block.
An installment agreement has been set up for your tax balance due. Learn about IRS letter 2840C and get the facts from the tax experts at H&R Block.