I, myself, am at a loss.
A trust sells, at a loss, nonresidential real estate that had been rented to third parties. The trust winds up and is filing its final Trust return and K1s to beneficiaries.
Is the loss a section 1231 loss that is treated as an ordinary loss to each of the beneficiaries?
and where does the loss go on the K1s?
Ordinary loss on Line 7 of the 1041. Flows to Box 6 of the K-1s. Flows to Schedule E Line 33f as the loss is not passive. Flows to Line 17 of the 1040.
Thanks. Would Box 6 of the K1s work too? I already have them done.
correction: would Box **7** work too?
. . . and where do final year expenses for the building go? Not on Schedule E, but added to the basis on my worksheet?
Didn't I say Box 6?
Your replies are not showing up within the thread on my news server.
The end result is the same (Sch E Line 33f) but it is a slight distortion of what transpired. It probably doesn't matter.
Your post is in the wrong thread.
Expenses relating to the sale (use cost basis) or expenses relating to the rental? It probably doesn't matter as it all is going to wind in the same place.... Sch E Line 33f.
Final year operating expenses prior to the sale. If they go on Schedule E, do they not get added into the basis? Seems cleaner if I just include them on my worksheet when figuring basis and forgetting about Schedule E for the final year.
Thanks for the help. Can't explain thread problem.
I think I said that it probably doesn't matter as it all winds up on the beneficiaries Sched E line 33f.
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