Question on Estate K-1

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Question on Estate K-1

Post by stewak2 »

Dual citizen, resident of Canada, commuting to work in US.
Virtually all income is US source.
Was beneficiary & executor of a US estate. The estate was a trust, and the final tax return for the trust generated a K-1 for me,
with a very large deduction.
If I amend my US return to include it, I am due a refund of over 30K USD from the IRS.
However, because FTCs don't align perfectly, and this is not deductible in Canada, I will owe the CCRA 41K CDN, once I amend
my Canadian return. It nets out to a loss of $1500-$2000 CDN.
Am I compelled to amend my US return and use this K-1 deduction?
I am aware a K1 can include income ( this one does not ) and there may be a penalty for not amending my US return,
even though it would result in a large refund, not additional liability.
Is not amending my US return, and waiting for IRS to cross check trust return K-1s to beneficiary returns ( if ever ) an option?
Is there an option to amend US return to include the K-1, but opt NOT to claim the deduction?
Thanks in advance
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