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.
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.
If you’ve received unemployment compensation or a state tax refund, you’ll receive Form 1099-G. Learn more about Form 1099-G and how it affects your taxes.
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.
Donating a qualified vehicle to a charity? Learn how Form 1098-C is used to report the details of your donation and how it affects your deduction.