Hawaii Beneficiary's Share of Income, Deductions, Credits, etc

Beneficiary's Share of Income, Deductions, Credits, etc
Schedule K-1, Form N-40, Rev. 2022, Beneficiaries Share of Income, Deductions, Credits, etc.
Clear Form
	 SCHEDULE K-1	
	 (FORM N-40)	
(REV. 2023)
	
	
		

STATE OF HAWAII — DEPARTMENT OF TAXATION

Beneficiary’s Share of Income, Deductions, Credits, etc.
Calendar Year 2023

N40SCHK1_I 2023A 01 VID01

or fiscal year beginning __________________, 2023 and ending __________________, 20_____

		

COMPLETE A SEPARATE SCHEDULE K-1 FOR EACH BENEFICIARY

Name of trust or decedent’s estate †
Beneficiary’s identifying number †	
	
Beneficiary’s name, mailing address and Postal/ZIP Code		

	
	

Amended K-1
Final K-1

Estate’s or trust’s EIN †
Fiduciary’s name, mailing address, and Postal/ZIP Code

(a) Allocable share item

(c) Calendar year 2023 Form N-11*/N-15**
filers enter the amounts in column (b) on:

(b) Amount

1	
2	
3	
	
4	

Interest.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 
Interest Worksheet (N-15)
Ordinary Dividends.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 
Form N-15, line 9
a	 Net short-term capital gain .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 
Capital Gain/Loss Worksheet, line 2 (N-15)
b	 Net long-term capital gain .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .
Capital Gain/Loss Worksheet, line 9 (N-15)
a	 Annuities, royalties, and other nonpassive income before
	 directly apportioned deductions. . . . . . . . . . . . . . . . . .
Form N-15, line 17
	
b	 Depreciation .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .
	
Include on applicable line of
	
c	 Depletion .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 
appropriate tax form
	
d	 Amortization .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .
5	 a	 Trade or business, rental real estate, and other rental income
	 before directly apportioned deductions. (see Instructions).  .  .  . 
Form N-15, line 17
	
b	 Depreciation .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .
	
Include on applicable line of
	
c	 Depletion .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 
appropriate tax form
	
d	 Amortization .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .
6	 Net income taxes paid to another state or foreign country
See Instructions for Form N-11, lines 21b and 35 or
(list on a separate sheet).  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 
Form N-15, lines 38b and 52
7	 a	 Total cost of qualifying property for the Capital Goods Excise
	 Tax Credit .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .
Form N-312
	
b	 Low-Income Housing Tax Credit .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 
Form N-586
	
c	 Tax Credit for Research Activities. . . . . . . . . . . . . . . . .
Form N-346
8	 Deductions in the final year of trust or decedent’s estate:
	
a	 Excess deductions on termination
Worksheet A-6, line 25 (N-11); Worksheet NR-6, line
	 (see Instructions).  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 
26 (N-15); or Worksheet PY-6, line 49 (N-15)
	
b	 Short-term capital loss carryover.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 
Capital Gain/Loss Worksheet, line 5 (N-15)
	
c	 Long-term capital loss carryover .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 
Capital Gain/Loss Worksheet, line 12 (N-15)
	
d	 Net operating loss (NOL) carryover. . . . . . . . . . . . . . . .
Form N-15, line 19
	
e	 .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 
	 Include on applicable line of
	
f	 .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 
appropriate tax form
9	 Other (itemize):
	
a	 Payments of estimated tax credited to you.  .  .  .  .  .  .  .  .  .  .  . 
Form N-11, line 38; Form N-15, line 55
	
b	 Tax-exempt interest
See Instructions for Form N-11, lines 10 and 18 or
	 .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 
Form N-15, line 8
	
c	 .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 
Include on applicable line of appropriate tax form
DISTRIBUTION OF INCOME NOT SUBJECT TO TAX IN HAWAII TO NONRESIDENT BENEFICIARIES — See Instructions

}

10	
11	
12	
13	

Interest.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 
Dividends.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  	
Other intangible income (state nature of income).  .  .  .  .  .  .  .  .  . 	
Capital gain (loss) on intangibles.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 

*	

For Form N-11 filers, if your federal Schedule K-1 (Form 1041) and Hawaii Schedule K-1 (Form N-40) amounts are different, the necessary
adjustments are to be made on the Hawaii Additions Worksheet and/or the Hawaii Subtractions Worksheet in the Form N-11 Instructions.

**	

All referenced worksheets are located in the Form N-15 Instructions.

ID NO 01

Include on applicable line on
Form N-15, Column A

SCHEDULE K-1 (FORM N-40)

SCHEDULE K-1
(FORM N-40)
(REV. 2023)		

		

PAGE 2

Instructions for Beneficiary Filing Form N-11 or Form N-15

Important Notes
For Form N-11 filers, if your federal Schedule K-1 (Form 1041) and
Hawaii Schedule K-1 (Form N-40) amounts are different, the necessary
adjustments are to be made on the Hawaii Additions Worksheet and/or the
Hawaii Subtractions Worksheet in the Form N-11 Instructions.

beneficiary of an estate or trust, do not materially participate is a passive
activity.

All worksheets referenced below are located in the Form N-15 Instructions.

Caution: The limitations on passive activity losses under IRC section 469
apply to estates and trusts. Federal rules for treating a beneficiary’s income
and directly allocable deductions from an estate or trust, and other rules
for applying the passive loss limitations to beneficiaries have not been
finalized. These rules will be provided in future federal regulations.

General Instructions

Line 7a. Total cost of qualifying property for the Capital Goods ­Excise
Tax Credit. — Calculate your credit on Form N-312.

Name, Mailing Address, and Identifying Number. — Your name, mailing
address, and identifying number, the estate or trust name, mailing address,
and identifying number should have been entered on the Schedule K-1 you
received.

Line 7b. Low-Income Housing Tax Credit. — Calculate your credit on
Form N-586.

Errors. — If you believe the estate or trust has made an error on your
Schedule K-1, notify the fiduciary of the estate or trust and ask for a
corrected Schedule K-1. Do not change any items on your copy. Be sure
that the ­estate or trust sends a copy of the corrected Schedule K-1 to the
Hawaii Department of Taxation.

Specific Instructions
If you are a nonresident beneficiary, see instructions for lines 10 through
13 below.
Line 1. Interest. — Report the amount from line 1 (Schedule K-1) on your
Interest Worksheet.
Line 2. Dividends. — Report the amount from line 2 (Schedule K-1) on
Form N-15, line 9.
Lines 3a and 3b. Capital Gains. — Report the amount from line 3a
(Schedule ­K-1) on your Capital Gain/Loss Worksheet, line 2. Report the
amount from line 3b (Schedule K-1) on your Capital Gain/Loss Worksheet,
line 9. If there is an attachment to this Schedule K-1 that reports a
disposition of a ­rental, rental real estate, or passive business activity, see
the instructions for federal Form 8582 for information on the treatment of
disposition of interests in a passive activity.
Lines 5a through 5d. — Internal Revenue Code (IRC) section 469 provides
rules that limit deductions and credits derived from passive activities to the
income derived from passive activities and the tax imposed on any net
income from such activities. A trade or business activity in which you, as

Line 7c. Tax Credit for Research Activities. — Calculate your credit on
Form N-346.
Lines 8a through 8d. Deductions in the final year of trust or decedent’s
estate. — If the fiduciary checked the “Final K-1” box at the top, you may
be allowed to deduct excess deductions from the final year of the trust or
decedent’s estate and certain unused carryovers (subject to limitations) on
your individual income tax return.
Line 9a. — For purposes of computing any underpayment and penalty
on Form N-210, Underpayment of Estimated Tax by Individuals and
Fiduciaries, you should treat the amount entered on line 9a as an estimated
tax payment made on January 20, 2024. Attach a copy of this Schedule K-1
to the Hawaii income tax return you file to substantiate your credit.
Line 9c. — If you are claiming other credits that are not listed in lines 7a
through 7c, report them on line 9c.
Lines 10 through 13
Nonresident Beneficiary. — Lines 10 through 13 reflect the total interest,
dividends, other intangible income, and capital gains or (losses) from the
sale of intangibles not subject to tax in Hawaii.
Section 235-4.5(a), Hawaii Revised Statutes (HRS), excludes from gross
income any intangible income, such as dividends and interest, earned by a
trust sited in the State to the extent that, during the taxable year of the trust,
the beneficial interest in the trust is held by a nonresident beneficiary or
nonresident beneficiaries. This exclusion does not apply to income received
from real property held in a land trust formed under Chapter 558, HRS.