Subchapter J of the Internal Revenue Code governs income taxation of estates and trusts- an area of tax law with numerous special rules, regulations, and professional customs. Form 1041 is unlike any other income tax return a tax professional encounters. This program explains the unique tax rules and opportunities for the knowledgeable tax advisor to provide valuable tax services to fiduciaries-from special tax accounting to options for reporting trust income and expenses. The program will contain state-specific information on the state's principal and income tax (including unique features of that Act) that is used to compute "accounting income" necessary for preparation of the Form 1041.
Learning Objectives
Participants will be able to:
- Advise fiduciaries regarding their tax duties for the income tax reporting
- Describe the types of trusts and their income impact
- Explain what is involved with trust accounting and dealing with the applicable state principal and income act
- Explain the filing requirements for trusts and the preparation of Form 1041
- Deal with unique issues for income and expenses affecting trusts and estate income taxes
- Describe distributable net income (DNI) and how it impacts taxes
Major Topics
- Estate of decedent as a taxpayer-filing requirements and tax planning
- Types of trusts
- Trust accounting and available tax elections
- Filing requirements
- Identifying deductible and nondeductible expenses for a trust or estate
- Unique classification of some income and expenses
- Computing accounting income under a state's principal and income act
- Distributable net income-the concept and its application
