1041 Preparation: Line by Line Explanation (Currently Unavailable)

Author: Arthur Joseph Werner

Learn to prepare U.S. Income Tax Return for Estates and Trusts (Form 1041) including how to answer the "nine questions." This course is the third of three parts of the 1041 Series covering issues involved in preparing the U.S. Income Tax Return for Estates and Trusts (Form 1041).

Publication Date: September 2016

Designed For
CPAs, EAs, and attorneys who need to understand Form 1041.

Topics Covered

• Reviewing the Form 1041 line by line
• The "Information" Portion
• Grantor Trust Issues
• The "Nine Questions"
• The "body"
• Income Line Items
• Example-1099 Discrepancy
• Deduction Line Items
• The Income Distribution Deduction
• The Mechanical Calculation of DNI

Learning Objectives

• Recognize how to properly file Form 1041 and the additional filing requirements of a grantor trust
• Identify instances where a trust would have multiple EINS
• Recognize affirmative answers to questions in specific sections of Form 1041
• Describe an asset's basis when a 1041 entity realized the capital gain for an asset using the §643(e)(3) election
• Identify unacceptable reasons to delay the closing of an estate
• Recognize how to properly allocate income to an estate
• Differentiate the various legal and professional fees and expenses incurred by an estate
• Identify when a grantor trust becomes an irrevocable trust
• Recognize when the final return of a 1041 entity does not include an exemption
• Describe a "skip" person for purposes of Form 1041
• Recognize when capital gain and losses reported on Form 1041 are generally subject to a full step-up in basis
• Identify real estate that becomes part of a decedent's estate upon the date of death
• Describe income in respect of a decedent (IRD)
• Recognize what happens when a form 1041 "other information" questions are answered incorrectly
• Identify when qualified dividends reported on Form 1041 are separated by estate and beneficiary
• Calculate DNI involving adding back personal exemptions to the taxable income on line 17 of Form 1041
• Recognize if the the 1041 entity made estimates tax payments prior to making beneficiary distributions

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (3 hours)

Program Prerequisites
None

Advance Preparation
None