How do I correctly report Schedule K-1 Form 1041 with Box 11 Excess Deductions on Termination?

The instructions are correct - these are two different types of deductions that need to be treated separately for tax purposes. Box 11A contains excess deductions that are classified as ordinary deductions, which is why they can be reported on Schedule 1, line 24k as an adjustment to income. These are above-the-line deductions that reduce your AGI. Box 11B contains excess deductions that are classified as itemized deductions. These can only be claimed on Schedule A and there's no alternative way to claim them if you're taking the standard deduction. Unfortunately, if you're taking the standard deduction, you would indeed "lose" the benefit of the Box 11B deductions. This is because you're already getting the benefit of the standard deduction, which the IRS has determined is more beneficial for you than itemizing. There's no mechanism to combine the Box 11A and Box 11B amounts and report them all on Schedule 1. You'll need to report them where the instructions specify or not at all.

After struggling with this exact situation last year, I found an incredibly helpful tool at https://taxr.ai that saved me so much headache. I had a very similar K-1 with Box 11 split between A and B and was confused about how to handle it with the standard deduction. The taxr.ai system analyzed my K-1 and other tax documents, then clearly explained what parts I could claim and where. It confirmed exactly what to do with Box 11A and 11B, plus found some other deductions I was missing from elsewhere in my tax situation. The best part was that it explained everything in plain English rather than tax jargon. It really helped me understand why certain deductions land where they do, and I ended up feeling confident about my filing instead of constantly second-guessing myself.

Just wanted to update after trying taxr.ai that was mentioned earlier. I was really confused about my Schedule K-1 Form 1041 with similar Box 11 issues plus a whole bunch of other entries I didn't understand. The service actually saved me a ton of money! It found that I had missed reporting some Box 5 income correctly from my K-1 (I had completely overlooked it), and explained exactly where my Box 11A deductions should go. It confirmed that Box 11B couldn't be used with the standard deduction, but then suggested some adjustments to my retirement contributions that more than made up for the lost deduction. The explanations were super clear about why Box 11A and 11B have to be treated differently. I finally understand that Box 11A items are considered "for AGI" deductions while 11B items are "from AGI" deductions, which is why they have different treatments.

For anyone dealing with K-1 issues like this, I had a similar problem last year and needed clarification directly from the IRS. After wasting HOURS trying to get through their regular phone lines (kept getting disconnected or put on endless holds), I found https://claimyr.com and their service was a game-changer. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c Basically, they hold your place in the IRS phone queue and call you when an actual IRS agent is on the line. I finally got a definitive answer about my K-1 Box 11 situation from an actual IRS representative who confirmed exactly what to do. They explained that Box 11A and 11B have to be reported separately because they represent fundamentally different types of deductions under the tax code. Saved me literally hours of frustration and gave me peace of mind that I was handling my K-1 correctly.

I need to eat my words about Claimyr from my earlier comment. After continuing to struggle with my K-1 questions and failing to get through to the IRS on my own (tried 3 times, each time on hold for over an hour before giving up), I decided to try the service. It actually worked exactly as advertised. I got a call back about 90 minutes after signing up, and there was a real IRS agent on the line. They confirmed everything about how to handle Box 11 on Form 1041 K-1s - Box 11A goes on Schedule 1 and Box 11B can ONLY go on Schedule A if you're itemizing. The agent even explained that this is a common point of confusion because the instructions aren't super clear, and many people try to combine the amounts incorrectly. Apparently, this is something they see flagged in their systems regularly. Really glad I tried it - saved me hours of frustration and gave me confidence I'm filing correctly.

Something no one has mentioned yet - make sure you check if the trust or estate that issued your K-1 is in its final year. Box 11 Excess Deductions on Termination only appears in the final year when the trust or estate is being closed. If you're getting this, it typically means the trust or estate has finished distributing all assets and is terminating. These excess deductions represent expenses that couldn't be used by the trust/estate itself, so they're passed to the beneficiaries. That's why there's the split between Box 11A and 11B - they're passing through different types of unused deductions that have different tax treatments at the individual level.

Has anyone actually calculated whether it's worth itemizing just to get the Box 11B deduction? Sometimes it might make sense to itemize even if it's slightly less than the standard deduction if you have other tax benefits that depend on your AGI. For example, if taking the Box 11B deduction by itemizing would lower your AGI enough to qualify for certain credits or avoid certain phaseouts, the overall benefit might outweigh the loss from not taking the full standard deduction.

I work as a tax preparer and see this Box 11 confusion frequently. Just to clarify a few key points that might help: First, the split between 11A and 11B isn't arbitrary - it reflects the underlying nature of the expenses that the trust/estate couldn't fully utilize. Box 11A typically contains expenses like investment advisory fees or other "miscellaneous" deductions that were subject to the 2% AGI threshold (though that threshold is suspended for trusts). Box 11B usually contains things like charitable deductions or other itemized deductions. Second, while it's true you can't claim Box 11B if you take the standard deduction, remember that you're only "losing" the benefit if the Box 11B amount is substantial. Most of the time, people are still better off with the standard deduction even accounting for the lost Box 11B. Third, make sure you're reporting the Box 11A amount correctly on Schedule 1, line 24k. Write "Form 1041 K-1 Box 11A" in the description field so it's clear where the deduction comes from. Finally, keep good records of this K-1 - the IRS does match these against the trust's final return, so make sure everything ties out properly.

I'm dealing with a similar situation and want to add a practical tip that helped me. When I was trying to decide whether to itemize or take the standard deduction with my Box 11B amount, I used the IRS Interactive Tax Assistant tool online to run both scenarios. It turns out my Box 11B was only about $800, and even adding it to my other potential itemized deductions (mortgage interest, state taxes, etc.), I still came out ahead by about $2,000 with the standard deduction. So yes, I "lost" that $800 deduction, but I gained $2,000 overall. The math was pretty clear once I laid it all out. Sometimes we get so focused on not wanting to lose any deduction that we forget the bigger picture. The standard deduction is designed to be beneficial for most taxpayers, and that includes situations like this where you might have some itemized deductions you can't use. Also, just to confirm what others have said - make sure you still claim that Box 11A amount on Schedule 1! That one you definitely don't want to miss since it reduces your AGI directly.

I've been following this discussion and wanted to share my experience from last year when I dealt with this exact same Box 11 situation. Like Miguel, I was really confused about the split between 11A and 11B and whether I was missing out on deductions by taking the standard deduction. What I found helpful was creating a simple spreadsheet to compare both scenarios. I listed all my potential itemized deductions (including the Box 11B amount) versus the standard deduction amount for my filing status. Even though it felt like I was "losing" the Box 11B deduction by not itemizing, the standard deduction was still significantly higher. One thing I learned that wasn't immediately obvious from the instructions is that Box 11A deductions are actually quite valuable because they reduce your AGI directly. This can have ripple effects on other parts of your tax return - potentially affecting things like the taxability of Social Security benefits, eligibility for certain credits, or other AGI-based calculations. The key insight for me was realizing that the tax code is designed this way intentionally. The standard deduction is meant to be a simplified alternative that provides a reasonable benefit without having to track and substantiate individual deductions. Most of the time, you're still coming out ahead even if you can't use every possible deduction. Make sure you don't forget to claim that Box 11A amount though - that's money left on the table if you miss it!

This is such a comprehensive discussion - thank you everyone for sharing your experiences! As someone who just received my first K-1 with Box 11 entries, I was completely lost until I found this thread. I want to emphasize something that really helped me understand the situation: the distinction between "for AGI" and "from AGI" deductions that was mentioned earlier. Box 11A deductions are "for AGI" (above-the-line), which means they reduce your adjusted gross income and can be taken regardless of whether you itemize. Box 11B deductions are "from AGI" (below-the-line), which means they can only be taken if you itemize and your total itemized deductions exceed the standard deduction. This framework helped me understand why the tax code treats these two types of deductions differently - it's not arbitrary, it's based on fundamental tax principles about when and how different types of deductions can be claimed. For anyone still struggling with this decision, I'd strongly recommend using the comparison approach that several people mentioned. Calculate your total potential itemized deductions (including Box 11B) versus your standard deduction amount, and don't forget to factor in the Box 11A deduction that you get to claim either way on Schedule 1. Most importantly, don't let perfect be the enemy of good. Even if you can't claim every possible deduction, you're likely still getting a substantial tax benefit from the standard deduction plus the Box 11A amount.

I've been dealing with K-1s for several years now and wanted to add one more perspective that might help. While everyone has correctly explained that Box 11B deductions can only be claimed if you itemize, there's one scenario worth considering that hasn't been fully explored. If you're close to the threshold where itemizing might make sense, don't forget to factor in any state tax benefits. Some states have different rules for itemized deductions or lower standard deduction amounts. In rare cases, you might find that itemizing makes sense at the state level even if it doesn't at the federal level, or vice versa. Also, if you have significant charitable contributions planned for the current tax year, you might want to consider bunching strategies. For example, if you're planning to make charitable donations over the next couple of years, you could potentially bunch them into the current year along with your Box 11B deduction to push your itemized deductions above the standard deduction threshold. That said, I want to echo what others have mentioned - in the vast majority of cases, you'll still come out ahead with the standard deduction even without being able to claim Box 11B. The standard deduction amounts have increased significantly in recent years and are designed to provide a good baseline benefit for most taxpayers. The most important thing is not to miss that Box 11A deduction on Schedule 1, line 24k. That's a valuable above-the-line deduction that reduces your AGI regardless of whether you itemize or take the standard deduction.