Schedule K-1 (Form 1041) reports a beneficiary’s allocable share of income, deductions, credits, and other items from an estate or nongrantor trust. This schedule is part of Form 1041 (US Income Tax Return for Estates & Trusts).

A domestic nongrantor trust must file Form 1041 if it meets one of the following during the tax year:

  1. The trust has any taxable income for the year;
  2. The trust has gross income of $600 or more;
  3. The trust has a beneficiary who is a nonresident alien; or
  4. The trust held an investment in a qualified opportunity fund (QOF) at any time during the tax year.
Purpose of Schedule K-1:

A domestic nongrantor trust is a taxable entity for U.S. federal tax purposes. The trust must prepare Form 1041 and include a Schedule K-1 for each beneficiary who received a distribution of property during the tax year.

For example, John Doe sets up an irrevocable nongrantor trust, naming his daughter Emily as the beneficiary. In 2022, the trust earned $2,000 in taxable income and distributed $400 cash to Emily. The trust must prepare and file Form 1041 and provide Emily with a Schedule K-1 showing her allocation of the taxable income.  

In general, a grantor trust is not required to file a Form 1041 and prepare Schedule K-1 for the grantor. The grantor trust may file a Form 1041 if it has its own EIN. See our video here for grantor trust reporting requirements.

What are the Components of the Form 1041 Schedule K-1

Part I – Information About the Estate or Trust:

  • Name and address of the estate or trust
  • Employer identification number (EIN) for the trust or estate
  • Name and address of the fiduciary/trustee
  • A question regarding whether the trust filed Form 1041-T (Allocation of Estimated Tax Payments to Beneficiaries)
  • A question regarding whether this is the final tax return filed for the trust or estate

Part II – Information About the Beneficiary:

Part III – Beneficiary’s Shares of Current Year Income, Deductions, Credits, and Other Items:

Each beneficiary’s allocation of items is reported on their separate Schedule K-1. These items include portfolio income (e.g., interest, dividends, capital gains), ordinary business income, rental real estate income, allocable deductions, and other credits.

Video Tutorials for Form 1120-S and Schedule K-1

Please view our videos below for information related to Schedule K-1:

Additional Information

Taxpayers can find more information in the Form 1041 Instructions and IRS Publication 559 (Survivors, Executors, and Administrators).