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The Line-By-Line Preparation of Form 1041 (MLC863L)
How to Properly Use Form 1041 to Report Taxes for an Estate Fiduciary
When a decedent leaves a fiduciary in charge of his or her estate, the fiduciary must fill out a special form with the Internal Revenue Service (IRS) to report what happens with the estate or trust. Income, deductions, gains and losses, as well as income that is distributed to beneficiaries or accumulated or held for future distribution to them, and any income tax liability of the estate or trust, must all be reported, according to the IRS. And don’t forget any household employees and their wages – the fiduciary must ensure employment taxes are reported to the IRS.
The resulting tax compliance issues can be dizzying, especially to practitioners who have never worked with fiduciary reporting and Form 1041 before. Preparing a U.S. income tax return for an estate or trust involves many issues that are not intuitive and that require some practice to get right. Don’t let your client be a test case! Join this course, the third of three parts, with tax attorney Arthur Joseph Werner and get a clear idea of how to handle the Form 1041 and all its reporting complexities.
Understanding the “Information” section
The “Nine Questions” and how to answer them
Schedule A – Charitable deductions
Schedule B – Income distribution deduction
Schedule K and Schedule K-1
Reviewing the form 1041
Part A – Type of entity (continued)
Grantor trust issues
Parts B, C, D and E
Part F – Check applicable boxes
Part G – The “645” election
The “Nine Questions”
Income line items
Example – 1099 discrepancy
The income distribution deduction
What distributable net income (DNI) is
The mechanical calculation of DNI
Computing the DNI
NASBA & IRS Category of Study: Taxes
Who Should Attend:
Certified Public Accountants (CPAs)
Enrolled Agents (EAs)
*Single User Price. For multiple users please call 1-800-223-8720
Arthur Joseph Werner, JD, MS (Taxation), received his B.S. in Accounting and his M.S. in Taxation from Widener University. He holds a J.D. in Law from the Delaware Law School. His lecture topic specialties extensively include the areas of Estate Planning, Financial Planning, and Estate and Gift Taxa...
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