Objective
- Be aware of fiduciary accounting principles
- Calculate Distributable Net Income and the income distribution deduction
- Prepare Form 1041 and Schedule K-1
Highlights
- Classifying receipts between “income” and “corpus” under the Uniform Principal and Income Act
- Calculation of DNI utilizing three different methods, a “forms” method (Schedule B), a “code” method, and a “shortcut” method, utilizing a worksheet of common income and expenses
- Proper W-2 preparation and procedures in the year of death
- Taxpayer passes before taking a required minimum distribution; what must be done?
- Forgetful fiduciaries of simple trusts
- Fluctuating trusts – Simple one year, complex the next
- Dividing income in the year of death
- Overview of Subchapter J
- Form preparation issues – Filing requirements and line-by-line explanations of Form 1041
- Taxable income of estates and trusts and expense allocation issues
- Specific deductions and miscellaneous itemized deductions
- Income in respect of a decedent
- The income distribution deduction calculation
- Relation of principal and income law to DNI
- Understanding how to handle capital gains and losses
- Allocating tax items to beneficiaries: another K-1
- Other considerations: excess deductions on termination
- Effects of the CARES and Tax Relief Acts on trusts: §461(l) Excess Business Loss Limitation, NOL, §163(j) modifications, new employer credits
- Comprehensive DNI case study, with principal (cost and FMV) and income reconciliation
- Comprehensive trust and estate case studies, with filled-in forms
Designed For
Accounting and Financial Professionals whose practice includes the preparation of fiduciary income tax returnsPrerequisite
Experience with the preparation of income tax returnsAdvanced Preparation
None