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.
An IRS appeals officer made a decision on your innocent spouse relief claim. Learn more about IRS letter 3288 from the tax experts at H&R Block.
What is an IRS transcript, and why is it useful? Learn more about the five different kinds of irs transcripts with the tax experts at H&R Block.
Get the facts from H&R Block about IRS revenue agent reports, which show the changes the IRS is proposing to your tax return after an IRS audit.
Learn more about letter 590, why you received it, and how to handle an IRS 590 letter with help from the tax experts at H&R Block.