Question

Section 1231 loss from Trust

Forum|Forum|1 year ago
March 8, 2025
1 reply
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I received a tax form from a trust for a Real Estate investment. They did not provide a K-1, but instead provided the loss from rental real estate, a section 1231 loss, and QBI details. I entered the loss from rental real estate and the QBI details under Estates and Trusts (form 1041) under the schedule K-1 section. However, the instructions say to enter the section 1231 loss on for 4797. I am trying to determine how to enter this information into TurboTax. Can somebody please advise as to how I should handle this?

D

DianeW777

Yes. This can be entered as a sale of business property. The steps to your entry are shown below for your convenience.

Open your TurboTax return (TurboTax Online or TurboTax Desktop)
Under Income and Expenses scroll to Other Business Situations > select Sale of Business Property
Select the checkbox next to 'Sales of Business or Rental Property.....' > Continue
On the screen 'Sales of Business or Rental Property' select No
On the screen 'Sales of Other Business Property' select Yes
On the screen 'Tell Us About Your Sale' select the holding period
On the screen 'Sales of Business or Rental Property' enter only the cost basis (amount of loss from your K-1)
This will enter your loss on Form 4797 in the appropriate section.