I am using H and R Block tax software to generate a 1041 K-1 for an Inherited IRA Distribution. When I fill out Line 5 – Other Portfolio and Nonbusiness Income ($40,000) for the Inherited IRA distribution then the software is automatically filling in Line 14 Other Information with Code E – Net Investment Income ($40,000) and Code H – Adjustment for Section 1411 Net Investment Income or Deductions (-$40,000). This doesn’t make sense to me and I think it’s a bug in the software! When I use the K-1 including Line 5 and Line 14 codes E and H in the 1040 Tax software there is a warning message that Codes E and H are unsupported. The Box 5 $40,000 gets transferred to Schedule E as I expected. I really think it’s a bug with the 1041 K-1 software and codes E and H should not have been used for an IRA distribution. What do you think? Maybe my biggest mistake is using H and R Block software instead of TurboTax!