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Fixed Assets and UltraTax CS 2023 help is now on Help and Support. We're still moving articles, but you can find most content for the 2023 tax year there. Continue using the Help & How-To Center for tax years 2022 and older.

Question

Is the special allowance for rental real estate activities with active participation allowed for fiduciary returns?

Answer

The special allowance is not applicable to trust returns. A critical diagnostic message displays if the designation is for an activity.

The special allowance is applicable to decedent's estate returns for the first two years of the estate's existence, just like an individual return. On Screen Rent-2, K1-3, or K1T-2, enter 2 in the Passive activity code field to indicate the activity is rental real estate with active participation. Also, on Screen OthInfo enter the amount of the $25,000 allowance, if any, that the surviving spouse will use in the current year.

Related topic: 1041-US: Passive loss information FAQs

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