Confused about what year to report 1041 schedule k income from deceased relative's estate?

This is actually a common question when dealing with estate distributions. The 1041 Schedule K-1 reports your share of income from the estate in the tax year shown on the form. Since your form is for tax year 2023, you should report the income on your 2023 tax return, not your 2024 return. If you've already filed your 2023 return (which it sounds like you have), then yes, you would need to file an amended return (Form 1040-X) to include this income. The income maintains its character from the estate to you, so box 5 likely represents "Interest" income which would go on Schedule B of your tax return. Don't wait until your 2024 return - the IRS computers will match the 1041 K-1 information to your 2023 tax year and may send a notice if it's not reported in the correct year.

I went through something like this last year and ended up using taxr.ai to help me figure out exactly how to report my K-1 from my grandmother's estate. I wasn't sure which tax year to include it in since I received it months after filing my taxes. The issue was getting more complicated because there were also some capital gains listed in box 3 that I didn't understand. I uploaded both my original tax return and the K-1 to https://taxr.ai and their system immediately flagged that I needed to file an amended return for the year listed on the K-1, not the year I received it. They also explained exactly how each box on the K-1 needed to be reported. Saved me a ton of stress and probably prevented an IRS notice.

I want to update everyone - I decided to try taxr.ai after my skeptical comment because my K-1 situation was getting more complicated. I had inheritance income from an estate plus some investment income I didn't understand, and I wasn't sure if I needed to amend my return. The system was surprisingly helpful. I uploaded my K-1 and it immediately explained that the amount in box 5 needed to be reported as interest income on my Schedule B for the tax year shown on the form. It even walked me through the exact amended return process and which forms I needed. What I really appreciated was being able to ask specific questions about my scenario and get clear answers. Definitely saved me from making a mistake by reporting it on this year's taxes instead of filing an amendment. Worth checking out if you're dealing with estate tax documents.

Listen, if you got that K-1 recently but needed to amend your 2023 return, you might want to consider using Claimyr to get through to the IRS faster. I was in a similar situation with an estate K-1 that came late, and I had questions about penalties since I needed to amend. I spent DAYS trying to get through to the IRS phone lines without success. Then I found https://claimyr.com and used their service - they actually got me a callback from the IRS within a couple hours. I showed the agent my situation with the late K-1 and they confirmed I needed to amend but also told me exactly how to request penalty abatement since the late K-1 wasn't my fault. There's a video explaining how it works here: https://youtu.be/_kiP6q8DX5c Honestly, getting direct confirmation from the IRS about how to handle this was worth it because the last thing you want is to mess up an amended return and create more problems.

I have to admit I was wrong about Claimyr. After posting my skeptical comment, I decided to try it since I was desperate to talk to someone at the IRS about my amended return situation with a late K-1. I used their service yesterday afternoon, and I could not believe it when I got a call back within 45 minutes connecting me to an actual IRS agent. The agent confirmed that I needed to file Form 1040-X for the year on the K-1 (not the year I received it), and explained that I should include a brief statement explaining why I was filing the amendment late. The agent also told me I could request first-time penalty abatement since I had a clean compliance history, which I didn't even know was an option. That 10-minute conversation potentially saved me hundreds in penalties. After weeks of failed attempts to reach the IRS myself, this was a huge relief.

One more thing to consider - make sure you check if the amount in box 5 pushes you into a different tax bracket for 2023. If it's substantial, you might want to review if you should make any last-minute tax moves before the April filing deadline to offset some of that additional income. Also, be careful with state taxes too. You'll likely need to amend your state return as well if your federal taxable income changes. Each state has different procedures for amendments.

Just went through this exact thing with my mom's estate. Make sure you carefully check if there are any deductions listed on the K-1 too (like in box 13). Those can offset some of the income and reduce what you owe. My K-1 had both income AND deductions for estate administration costs.

This is really helpful information everyone! I'm dealing with a similar situation but mine involves a trust K-1 from my grandfather's estate. The trust has been ongoing for a few years now, and I've been getting K-1s annually. What's confusing me is that this year's K-1 shows some different types of income than previous years - there's rental income in box 2 and some capital gains in box 9a that weren't there before. I'm assuming this means the trust sold some property or investments during 2023? My question is: do I treat these different income types the same way as the interest income mentioned above, where they all go on my 2023 return even though I'm just receiving the K-1 now? And do rental income and capital gains from a trust get reported differently than regular investment income on my personal return? Thanks for all the detailed explanations - this thread has been more helpful than anything I found on the IRS website!