Reviewing beneficiary allocation information (1041)

Alerts and notices

In the Beneficiary Information dialog (View > Beneficiary Information or Ctrl + R), you'll see an Allocation Summary at the top of the screen. Here you can see what allocation information you've entered for all the beneficiaries on the return without looking at each beneficiary. If the return is allocating differently than what is listed in the Allocation Summary, review the related critical and FYI diagnostics.

Here are the messages, in order of precedence, that you can receive and the description of that message.

Ordinary Income

Message Description
Allocation based on charitable trust ordering rules If you prepare Form 5227 for a charitable remainder annuity trust or a charitable remainder unitrust, the allocation of ordinary income to beneficiaries is based on the ordering rules detailed in the Form 5227 instructions. Input for charitable remainder trusts is in the Other Returns section on the Federal tab.
Equal Allocation You marked the First tier beneficiaries: Allocation all items, except capital gains, equally field on Screen Allocate in the Allocations folder. Marking this field has precedence over all other input for required distributions.
Ownership Share You are preparing a return for a pooled income fund and there is data in the Pooled income funds: Allocate based on ownership share field. Data for the ownership share ratio is in the Other Returns section on the Federal tab. The allocation is based on a beneficiary’s share divided by the sum of all the beneficiary’s share.
Special Allocation Any beneficiary has data in the Special Allocations button on the Federal tab. A dot on the button indicates data exists for the beneficiary. Data in the Special Allocations button has precedence over the Income Distributions data for the applicable category of income.
Income Distributions Allocation Any beneficiary has an amount or percent entered in the Income distributions line in the Allocation section on the Federal tab.
No Allocation No allocations are entered for the beneficiaries on a non-final return.
Default Equal Allocation No allocations are entered for a simple trust, grantor trust, agency relationship, or a final return.

Capital Gains

Message Description
Allocation based on charitable trust ordering rules If Form 5227 is being prepared for a charitable remainder annuity trust or a charitable remainder unitrust, the allocation of ordinary income to beneficiaries is based on the ordering rules detailed in the Form 5227 instructions. Input for charitable remainder trusts is in the Other Returns section on the Federal tab.
Equal Allocation You marked the First tier beneficiaries: Allocate capital gains equally field on Screen Allocate in the Allocations folder. Marking this field has precedence over all other input for required distributions.
Ownership Share You are preparing a return for a pooled income fund and the Pooled income funds: Allocate based on ownership share field has data. Input for the ownership share ratio is in the Other Returns section on the Federal tab. The allocation is based on a beneficiary’s share divided by the sum of all the beneficiary’s share.
Allocation by Amount Any beneficiary has an amount entered for short-term or long-term capital gains in the Allocations section on the Federal tab.
Allocation by Percent Any beneficiary has a percent entered for short-term or long-term capital gains in the Allocations section on the Federal tab
No Allocation No allocations are entered for the beneficiaries on a non-final return
Default Equal Allocation No allocations are entered for a final return.