Trust / Estate K-1 Decoder · Form 1041

Trust type

Beneficiary marginal rate

Box 1 · Interest income (ordinary)

Box 2b · Qualified dividends

Box 4a · Net long-term capital gain

Box 7 · Net rental real estate

State income tax withheld

Box 11 · Final-year deductions (excess)

Beneficiary 1040 flow

Ordinary income (Sch B · 1040)

Qualified dividends (1040 line 3a)

LTCG (Sch D)

Rental / passive (Sch E pg 2)

Estimated federal tax

DNI carries character

Yes

Trust DNI (distributable net income) caps the trust's distribution deduction AND the beneficiary's income inclusion per §651/§661. Character flows through.

Get K-1 review with our office

Form 1041 Schedule K-1 per IRC §651 (simple), §661 (complex), §671-679 (grantor). The LTCG rate shown is an estimate from the beneficiary's marginal bracket (0% at 12%, 20% at 37%, otherwise 15%). The actual rate depends on total taxable income against the 2026 thresholds. Educational tool, not legal advice. Call 689-331-5723 or email info@zerofusstaxes.com.