Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2025 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card
Distributing capital gains from a trust is one of the most misunderstood concepts in fiduciary income tax. In this course, we will examine the intersection of fiduciary accounting and fiduciary tax to understand when capital gains can be distributed from a trust to appear on a beneficiary’s schedule K-1. We will also review when capital gains should not be distributed and how the terms of the governing documents impact the tax reporting obligations.
Publication Date: January 2023
Designed For
Attorneys, CPAs, Enrolled Agents
Topics Covered
- Form 1041 Recap
- Distributable Net Income
- Fiduciary Accounting
- Distributing Income and Capital Gains on Form 1041 (Examples)
- Review
Learning Objectives
- Describe the fiduciary accounting rules governing the allocation of capital gains and losses to beneficiaries of trusts and estates
- Explain when a trust or estate can distribute capital gains to a beneficiary on a schedule K-1
- Understand when not to allocate capital gains from a trust or estate to a beneficiary
- Analyze the potential benefits making certain elections to allocate capital gains to beneficiaries
- Recommend drafting techniques to achieve the optimal income allocation between the trust/estate and beneficiaries
Level
Intermediate
Instructional Method
Self-Study
NASBA Field of Study
Taxes (2 hours)
Program Prerequisites
Basic understanding of Fiduciary Income Taxation
Advance Preparation
None
Instructor
Klaralee R. Charlton
Klaralee Charlton is a Partner at 3i Law in Denver, Colorado. She practices fiduciary tax, estate administration, and business transactional law. As part of her practice, she guides clients through the process of administering a loved one’s estate including the collection, valuation, management and transfer of assets including financial accounts, real estate, and business interests with a focus on minimizing estate and income tax liability. Klaralee also works closely with trustees of ongoing trusts to ensure compliance and prepares clients’ fiduciary income tax returns annually.
Klaralee has written and lectured on topics including estate and gift tax, fiduciary income tax reporting and U.S. regulations governing the valuation of small family businesses. She is an active member of the Colorado Bar Association, Tax Section and Adjunct Profession at the University of Denver, Graduate Tax Program.
She earned her J.D. in 2011 from the University of Utah, S.J. Quinney College of Law, her LL.M. in Tax Law from the University of Denver in 2013, and her B.A. in political science in 2009 from Bryn Mawr College. She is admitted to practice in both Colorado and Montana.