Form 1041: Income Taxation of Estates and Trusts

Author/Moderator: William Lester, CPA, JD, L.L.M.

Publisher: AICPA

Availability: In Stock

Description

Table of Contents

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Description

Explore a nuts-and-bolts approach to the complicated interplay of fiduciary and income tax rules for accounting for the income and expenses of estates and trusts. Get invaluable practice from comprehensive case studies and understand the provisions of Subchapter J covering estates, trusts, beneficiaries and descendants. Examine grantor trusts and planning for children under 18 years of age. Cover tax computations, tax-saving tips and much more.

Objectives:

Apply the concepts of federal income taxation of estates and trusts
Understand the provisions of Subchapter J covering estates, trusts, beneficiaries and decedents
Understand grantor trusts and special problems of the Kiddie-Tax for children under 18 years of age

Prerequisite: Basic knowledge of federal income taxation

Accepted for PFS credit.

See full description

Chapter 1 - Introduction
- Learning Objective
- Introduction
Chapter 2 - Legal Aspects of Estates and Trusts
- Learning Objectives
- Introduction
- What Is a Trust?
- Creation of Trusts
  - Methods of Creating a Trust
  - Formal Requirements for Creating a Trust
  - Trusts Subject to Subchapter J
  - Other Arrangements Not Subject to Subchapter J
- Trustee Powers
  - State Trust Law
  - General Powers of Trustee
  - Investment Powers
  - Prohibited Transaction Self-Dealing
- Allocations between Principal and Income
Chapter 3 - Subchapter J Fundamental Principles and Definitions
- Learning Objectives
- Introduction
- Classification of Trusts and Estates
  - Simple Trusts
  - Complex Trusts
- Trust Taxable Income and Distributable Net Income
  - Trust Taxable Income
  - Special Depreciation Rules
  - Distribution Deduction
  - Distributable Net Income (DNI)
Chapter 4 - Subchapter J Fundamental Calculation Concepts
- Learning Objectives
- Introduction
- Basic Taxation of Simple Trusts
  - Conduit Calculation
  - Imperfect Conduit
- Basic Taxation of Complex Trusts
  - Conduit Approach
  - Accumulation
  - Tax Effect of Accumulation
  - Multiple Trusts
- Exclusions from Distribution Rules - §663(a)
  - Gifts, Bequests, Etc.
  - Charitable Bequests
  - Denial of Double Deduction
- Distributions in Kind
  - Deemed Sale Rule
  - Election
- Taxation of Beneficiary
- When Beneficiary Is Taxed
Chapter 5 - Simple Trusts
- Learning Objective
- Introduction
- Fiduciary Income Tax Problem
- Problems
  - Directions
  - Problem 5-1: Tax-Exempt Interest; Taxable Interest
  - Problem 5-2: Rental Income, Depreciation, Casualty Loss
  - Problem 5-3: Gain on Sale of Securities, Trustee's Commission (Corpus)
  - Problem 5-4: Trustee's Commission (Income)
- Appendix
  - Solution to Problem 5-1
  - Solution to Problem 5-2
  - Solution to Problem 5-3
  - Solution to Problem 5-4
Chapter 6 - Complex Trusts and Estates
- Learning Objective
- Introduction
- Nature of Complex Trusts (Including Estates)
  - Components
- Tier System
- Charitable Contributions and DNI for First-Tier Distributions - Modified DNI
- Problems
  - Directions
  - Problem 6-1
  - Problem 6-2
  - Problem 6-3
  - Problem 6-4: Charitable Deduction - Unlimited Yet Limited
- Appendix
  - Solution to Problem 6-1
  - Solution to Problem 6-2
  - Solution to Problem 6-3
  - Solution to Problem 6-4
Chapter 7 - Tax Return Preparation
- Learning Objective
- Introduction
- Problems
  - Directions
  - Comprehensive Trust Problem 7-1a
  - Comprehensive Trust Problem 7-1b
  - Comprehensive Trust Problem 7-2
  - Ben E. Wilson Trust
  - Estate Problems
  - Estate Problem 7-1
  - Estate Problem 7-2
- Appendix
  - Solution to Comprehensive Trust Problem 7-1a
  - Solution to Comprehensive Trust Problem 7-1b
  - Solution to Comprehensive Trust Problem 7-2
  - Observations - Estate Tax Problems
Chapter 8 - Grantor Trust Rules and Related Matters
- Learning Objectives
- Introduction
- Definitions and Special Operating Rules
  - Adverse Party
  - Non-Adverse Party
  - Related/Subordinate Party
  - Independent Trustee
  - Trustee Categories
- Reversionary Interests (§673)
  - Before March 1, 1986
  - After March 1, 1986
- Controls over the Benefits of the Trust Property (§674)
  - Permissible Powers over Income
- Powers over Principal
  - Limitation of Powers
- Administrative Controls over the Trust (§675)
  - Prohibited Powers
  - Fiduciary Powers
  - Loans
- The Power to Revoke (§676)
  - Definition
  - Reversion Event
  - Consent
- Income for Grantor's Benefit (§677)
  - Delayed Enjoyment
  - Support/Maintenance
  - Overlooked Enjoyment
- Special Rules and Considerations
  - Trustee Removal
  - Third-Party Owner
  - Defective Grantor Trust
- Unearned Income of Children under Age 14
  - Net Unearned Income
  - Minimum Amount
  - Divorced Parents
  - Deceased Parents
  - Reporting
Chapter 9 - Advanced Concepts and Planning
- Learning Objective
- Introduction
- Sale or Distribution of Assets in Kind
  - Gain/Loss
  - Taxation to Beneficiary
  - Installment Sales
- Special Tax on Trusts Selling Appreciated Property
- Determining Principal and Income
  - Selection of Investments
  - Depreciation Reserve
  - Natural Resources
  - Asset Dispositions
- Tax Attributes of the Beneficiaries
  - Charitable Entities
  - Bracket Play
- Depreciation Reserve Mandated by Trust Agreement
- Problem 9-1
- 65-Day Rule
  - Election
  - Simple Trusts
- Separate Share Rule
  - Termination of Interest
  - Multiple Beneficiaries
  - Non-Elective
- Capital Gains and Losses
  - Timing
  - Final Distributions
  - Fiduciary Intent
- Capital Losses
- Alternative Minimum Tax
  - Schedule I
  - DNI/DNAMTI Variations
  - Reasons for Variations
- Payment of Estimated Taxes
  - Trusts
  - Estates
Chapter 10 - Income in Respect of Decedent, Decedent's Final Return, and Other Concepts Affecting Estates and Decedents
- Learning Objectives
- Introduction
- Income in Respect of a Decedent (IRD) (§691)
  - Main Concept
  - Examples
  - Estate Inclusion
  - Deduction of Income Tax from Estate
  - DRD Items
  - General Planning Considerations for IRD
  - Examples
- The Decedent's Final Return
  - Special Elections
  - Income from Estates and Trusts
  - Income from Partnerships
  - Income from S Corporations
  - Depreciation
  - Charitable Contributions
  - Medical Expenses
  - Net Operating Loss
  - Capital Losses
  - Filing Decedent's Final Return
- Selection of Fiscal Years
  - Estimates
  - Unused Items
  - Brackets
  - Wasted Items
  - Other Considerations
- Estate Termination - Planning
  - Administrative Period
  - Alternate Valuation
- Planning with Regard to Basis
  - Gains
  - Losses
- Acceleration of IRD
- Inadvertent Sales and Exchanges
- Bunching Income
  - Fees and Expenses
  - Residuary Beneficiaries
  - Charitable Deductions
- 2% Floor on Miscellaneous Deductions
  - Basic Rule
  - Exceptions
  - Inclusion of Qualified Revocable Trust as Part of Estate for Income Tax Purposes
Chapter 11 - Ethics Focus: Taxation
- Ethics Overview
- Recent Developments
- Spotlight on Independence in Tax Services
- Key Ethical Dilemmas and Judgment Calls
- Addressing Ethical Dilemmas
- Available Resources
Chapter 12 - Latest Developments
Appendix A - Summary of Trust Instrument

736944

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NASBA Field of Study: Taxes

Level: Basic

Recommended CPE Credit: 10

Important Information on Your CPE Credit

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