PDF document

- 1 -

Userid: CPM Schema: Leadpct: 100% Pt. size: 9.5 Draft Ok to Print
instrx
AH XSL/XML Fileid: … s/i1041n/202212/a/xml/cycle02/source (Init. & Date) _______

Page 1 of 11 9:19 - 4-Oct-2022

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Department of the Treasury
Internal Revenue Service
Instructions for Form 1041-N

(Rev. December 2022)

U.S. Income Tax Return for Electing Alaska Native Settlement Trusts

Section references are to the Internal Revenue Code unless income assigned to the ANST. See Part III—Other
otherwise noted. Information, Question 1, later, for the information required to
be attached to the form.
Future Developments
For the latest information about developments related to Tax
Form 1041-N and its instructions, such as legislation enacted An electing ANST pays tax on its taxable income at the
after they were published, go to IRS.gov/Form1041N. lowest rate specified for single individuals (10%). If the ANST
has net capital gain or qualified dividends, use the tax
computation on Part IV of Schedule D, which applies a 0%
General Instructions rate on its adjusted net capital gain.
Use this revision for tax years beginning after 2017.
Disqualifying Acts
Purpose of Form If, at any time, a beneficial interest in an ANST may be
Under section 646, an Alaska Native Settlement Trust disposed of to a person in a manner that isn't permitted by
(ANST) may elect to apply special income tax treatment to section 7(h) of the ANCSA (if the interest were settlement
the trust and its beneficiaries. This one-time election is made common stock), then:
by filing Form 1041-N in the first tax year of the trust. Form • If no election has previously been made, the ANST can't
1041-N is used to report an ANST's income, deductions, elect special tax treatment under section 646 for the trust and
gains, losses, etc., and to figure and pay any income tax due. its beneficiaries; or
Form 1041-N is also used to report special information • If the election is in effect at that time:
applicable to an ANST's filing requirements. 1. The election won't apply as of the first day of the tax
year in which a prohibited disposition is first allowed;
Definitions
2. The section 646 tax treatment won't apply to the trust
An ANST is a settlement trust within the meaning of section for that tax year or in any subsequent tax years; and
3(t) of the Alaska Native Claims Settlement Act (ANCSA).
3. The distributable net income of the trust will be
An Alaska Native Corporation (ANC) has the same increased by the current or accumulated earnings and profits
meaning as the term "Native Corporation" has under section of the sponsoring ANC as of the close of the tax year, after
3(m) of the ANCSA. adjustment is made for all distributions made by the
A sponsoring ANC means the ANC that transfers assets sponsoring ANC during the tax year. However, this increase
to an electing ANST. is limited to the fair market value (FMV) of the trust's assets
as of the date the beneficial interest of the trust first becomes
A trustee is a fiduciary of the trust. Any reference in these
disposable.
instructions to “you” means the trustee of the trust.
If stock in the sponsoring ANC may be disposed of to a
Tax Treatment of an Electing ANST person in a manner that isn't allowed by section 7(h) of the
ANCSA (if the stock were settlement common stock) and at
Adjusted Gross Income (AGI) any time after such disposition of stock is first allowed, the
Figure the AGI of an electing ANST by subtracting from total corporation transfers assets to an ANST, then items 1, 2, and
income (line 5) administrative costs (lines 7 through 9) and 3 above will apply to the ANST in the same manner as if the
the exemption amount (line 11). Administrative costs are ANST allowed dispositions of beneficial interests in the
deductible to the extent they would not have been incurred if ANST in a manner not allowed by section 7(h) of the ANCSA.
the property were not held by the ANST.
The surrender of an interest in an ANC or an electing
Taxable Income ANST by the shareholder or beneficiary, for a whole or partial
redemption or for the whole or partial liquidation of the
In general, an electing ANST's taxable income is figured in corporation or trust, will be considered a transfer allowed by
the same manner as any other taxable trust (see Internal section 7(h) of the ANCSA.
Revenue Code subchapter J). However, the electing ANST
isn't allowed to take an income distribution deduction, though Information Reporting Requirements
it can claim an exemption deduction, the amount of which Electing ANSTs must complete Schedule K and file it with
depends on the terms of the trust. Form 1041-N. The ANST must also provide a copy of
See the Schedule K instructions for information on the Schedule K to the sponsoring ANC by the date Form 1041-N
beneficiaries' tax treatment of distributions received from the is required to be filed with the IRS. The ANST isn't required to
ANST. provide information to the beneficiaries on distributions made
to them. The sponsoring ANC will provide the beneficiaries
Income Assignment From a Native Corporation with any required information.
The ANST reports income assignments from an ANC on
the appropriate income line consistent with the type of

Oct 04, 2022 Cat. No. 38105U

- 2 -

Page 2 of 11   Fileid: … s/i1041n/202212/a/xml/cycle02/source                                            9:19 - 4-Oct-2022

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Who Must File                                                       • Give you a copy of the return for your records, in addition 
                                                                    to the copy to be filed with the IRS.
The trustee of any electing ANST having any taxable income, 
or having gross income of at least $600 for the tax year, must      Paid Preparer Authorization
file Form 1041-N for that year.
                                                                    If the trustee wants to allow the IRS to discuss the ANST's 
Making the Election                                                 tax return with the paid preparer who signed it, check the 
                                                                    “Yes” box in the signature area of the return. This 
        The trustee of an ANST must make this election by           authorization applies only to the individual whose signature 
  !     the due date (including extensions) for filing the          appears in the Paid Preparer Use Only section of the ANST's 
CAUTION ANST's tax return for its first tax year.                   return. It doesn't apply to the firm, if any, shown in that 
                                                                    section.
The trustee makes the election for the ANST by signing Form 
1041-N in the signature block on page 1. The return must be           If the “Yes” box is checked, the trustee is authorizing the 
filed by the due date (including extensions) for filing the         IRS to call the paid preparer to answer any questions that 
ANST's tax return for its first tax year. Once the election is      may arise during the processing of the ANST's return. The 
made, it applies to all subsequent years and can't be               trustee is also authorizing the paid preparer to:
revoked.                                                            • Give the IRS any information that is missing from the 
                                                                    ANST's return;
When To File                                                        • Call the IRS for information about the processing of the 
ANSTs file Form 1041-N by the 15th day of the 4th month             ANST's return or the status of its refund or payment(s); and
following the close of the tax year. If the due date falls on a     • Respond to certain IRS notices that the trustee has shared 
Saturday, Sunday, or legal holiday, file on the next business       with the preparer about math errors, offsets, and return 
day.                                                                preparation. The notices won't be sent to the preparer.
                                                                      The trustee isn't authorizing the paid preparer to receive 
Private Delivery Services                                           any refund, enter into any agreement (including those 
You can use certain private delivery services (PDSs)                regarding additional tax liability), or otherwise represent the 
designated by the IRS to meet the "timely mailing as timely         ANST before the IRS. If the trustee wants to expand the paid 
filing" rule for tax returns. Go to IRS.gov/PDS for the current     preparer's authorization, see Pub. 947, Practice Before the 
list of designated services.                                        IRS and Power of Attorney.
  The PDS can tell you how to get written proof of the                The authorization can't be revoked. However, the 
mailing date.                                                       authorization will automatically end no later than the due date 
  For the IRS mailing address to use if you’re using a PDS,         (regardless of extensions) for filing the ANST's next tax 
go to IRS.gov/PDSStreetAddresses.                                   return.

        PDSs can't deliver items to P.O. boxes. You must            Accounting Methods
  !     use the U.S. Postal Service to mail any item to an          Figure taxable income using the method of accounting 
CAUTION IRS P.O. box address.
                                                                    regularly used in keeping the ANST's books and records. 
                                                                    Generally, permissible methods include the cash method, the 
Extension of Time To File                                           accrual method, or any other method authorized by the 
Use Form 7004, Application for Automatic Extension of Time          Internal Revenue Code. In all cases, the method used must 
To File Certain Business Income Tax, Information, and Other         clearly reflect income.
Returns, to request an automatic extension of time to file.
                                                                      Generally, the ANST may change its accounting method 
  An extension of time to file doesn't extend the time to pay       (overall method or for any material item) only by getting 
the tax.                                                            consent on Form 3115, Application for Change in Accounting 
                                                                    Method. For more information, see Pub. 538, Accounting 
Where To File                                                       Periods and Methods.
File Form 1041-N at the following address.
                                                                    Accounting Periods
  Department of the Treasury                                        All electing ANSTs must adopt a calendar year.
  Internal Revenue Service
  Ogden, UT 84201-0027                                              Rounding Off to Whole Dollars
                                                                    You may round off cents to whole dollars on the ANST's 
                                                                    return and schedules. If you do round to whole dollars, you 
Who Must Sign
                                                                    must round all amounts. To round, drop amounts under 50 
The trustee or an authorized representative must sign Form          cents and increase amounts from 50 to 99 cents to the next 
1041-N.                                                             dollar. For example, $1.39 becomes $1 and $2.50
                                                                    becomes $3.
Paid Preparer
Generally, anyone who is paid to prepare a tax return must            If you have to add two or more amounts to figure the 
sign the return and provide the information requested in the        amount to enter on a line, include cents when adding the 
Paid Preparer Use Only area of the return. The person               amounts and round off only the total.
required to sign the return must:
• Complete the required preparer information;                       Estimated Tax
• Sign it in the space provided for the preparer's signature;       Generally, an ANST must pay estimated income tax if it 
and                                                                 expects to owe at least $1,000 after subtracting withholding 

                                                                -2-                Instructions for Form 1041-N (Rev. 12-2022)

- 3 -

Page 3 of 11 Fileid: … s/i1041n/202212/a/xml/cycle02/source 9:19 - 4-Oct-2022

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

and credits. For details and exceptions, see Form 1041-ES, Line 3a—Name and Title of Trustee
Estimated Income Tax for Estates and Trusts. Enter the name and title (if any) of the trustee. If a fiduciary
relationship was created or terminated, file Form 56, Notice
Interest and Penalties
Concerning Fiduciary Relationship.
Interest If a fiduciary relationship wasn't created or terminated but
Interest is charged on taxes not paid by the due date, even if the fiduciary had a change in name or another fiduciary's
an extension of time to file is granted. Interest is also charged name was entered, check the “Change in fiduciary's name”
on the failure-to-file penalty, the accuracy-related penalty, box on line 6.
and the fraud penalty. The interest charge is figured at a rate
determined under section 6621. Line 3b—Address
Include the suite, room, or other unit number after the street
Late Filing of Return address. If the Post Office doesn't deliver mail to the street
The law provides a penalty of 5% of the tax due for each address and you have a P.O. box, show the box number
month, or part of a month, that the return isn’t filed up to a instead of the street address.
maximum of 25% of the tax due. If the return is more than 60 If you change your address after filing Form 1041-N, use
days late, the minimum penalty is the smaller of $435 or the Form 8822-B, Change of Address or Responsible
tax due. The penalty won’t be imposed if you can show that Party—Business, to notify the IRS.
the failure to file on time is due to reasonable cause. If you
If a different address from the prior year was entered and
receive a notice about penalty and interest after you file this
Form 8822-B wasn't filed, check the box on line 6 for
return, send us an explanation, and we will determine if you
“Change in fiduciary's address.”
meet reasonable-cause criteria. Don’t attach an explanation
when you file Form 1041-N. Line 6
For more information about penalties for late filing, see Be sure to check all the boxes that apply. Also, see the
Late Filing of Return in the Instructions for Form 1041. line 3a and line 3b instructions above for information
regarding a change in the fiduciary's name and for
Late Payment of Tax information on changes to the fiduciary's address.
Section 6651 also provides for penalties for late payment.
Generally, the penalty for not paying the tax when due is /1 2 Part II—Tax Computation
of 1% of the unpaid amount for each month or part of a
month it remains unpaid. The maximum penalty is 25% of the Income
unpaid amount. The penalty is imposed on the net amount Line 2a—Total Ordinary Dividends
due. Any penalty is in addition to interest charges on late
payments. Report the total of all ordinary dividends received during the
If you include interest or either of these penalties with tax year.
! your payment, identify and enter these amounts in
CAUTION the bottom margin of Form 1041-N. Don’t include the Line 2b—Qualified Dividends
interest or penalty amount in the balance of tax due on
line 18. Enter the ANST's total qualified dividends on line 2b and use
Part IV of Schedule D to figure the ANST's tax. Qualified
Underpaid Estimated Tax dividends are eligible for a lower tax rate than other ordinary
income. Generally, these dividends are shown in box 1b of
If the trustee underpaid estimated tax, use Form 2210, Form(s) 1099-DIV, Dividends and Distributions. See Pub.
Underpayment of Estimated Tax by Individuals, Estates, and 550, Investment Income and Expenses, for the definition of
Trusts, to figure any penalty due. Enter the amount of the qualified dividends if you received dividends not reported on
penalty in the bottom margin of Form 1041-N. Don’t include it Form 1099-DIV.
in the balance of tax due on line 18.
Exceptions. Some dividends may be reported as qualified
Other Penalties dividends in box 1b of Form 1099-DIV but aren't qualified
Other penalties can be imposed for negligence, substantial dividends. These include the following.
understatement of tax, and fraud. See Pub. 17, Your Federal • Dividends received on any share of stock that the ANST
Income Tax, for details on these penalties. held for less than 61 days during the 121-day period that
began 60 days before the ex-dividend date. The ex-dividend
date is the first date following the declaration of a dividend on
Specific Instructions which the purchaser of a stock isn't entitled to receive the
next dividend payment. When counting the number of days
Enter the year (or period) for which you are filing for the the ANST held the stock, include the day you disposed of the
electing ANST. stock but not the day you acquired it.
• Dividends attributable to periods totaling more than 366
Part I—General Information days that the ANST received on any share of preferred stock
held for less than 91 days during the 181-day period that
Line 1—Name of Trust began 90 days before the ex-dividend date. Preferred
Enter the exact name that was used to apply for the employer dividends attributable to periods totaling less than 367 days
identification number (EIN) for the trust to file Form 1041-N. are subject to the 61-day holding period rule above.
• Dividends on any share of stock to the extent that the
ANST is under an obligation (including a short sale) to make

Instructions for Form 1041-N (Rev. 12-2022) -3-

- 4 -

Page 4 of 11 Fileid: … s/i1041n/202212/a/xml/cycle02/source 9:19 - 4-Oct-2022

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

related payments with respect to positions in substantially Miscellaneous itemized deductions subject to the 2% floor
similar or related property. will not be allowed for tax years 2018 through 2025.
• Payments in lieu of dividends, but only if you know or have
reason to know that the payments aren't qualified dividends. Line 9—Other Deductions

Line 3—Capital Gain or (Loss) Attach a schedule listing by type and amount all allowable
deductions that aren't deductible elsewhere on the form. No
Enter the gain from Schedule D, line 11, or the loss from deduction is allowed for distributions to beneficiaries.
Schedule D,
line 12. An ANST may elect under section 965(n) to determine the
amount of the net operating loss (NOL) for a tax year
Note. Report capital gain distributions on Schedule D (Form determined under section 172 and the amount of taxable
1041-N), line 7. income to be reduced by NOL carryovers or carrybacks to
such tax year without regard to certain amounts under
Line 4—Other Income section 172. The amount not taken into consideration (the
reduction amount) is generally equal to the amount of the
List the type and amount of income not included on lines 1a section 965(a) inclusion (net of the section 965(c) deduction).
through 3. List the types and amounts on an attached If, as a result of an election under section 965(n), the amount
schedule if the ANST has more than one item of other of the NOL for the tax year is adjusted, the reduction amount
income. is included in other income on line 4. If, as a result of an
election under section 965(n), the taxable income reduced by
Include on line 4 taxable contributions received from an NOL carryovers or carrybacks is reduced, the NOL deduction
ANC. See also Part III—Other Information, Question 1, later, on line 4 is reduced by the reduction amount. See section
for additional information that may need to be attached to the 965(n) and the regulations thereunder for more information.
return. Include on this line income recognized on the early
disposition of noncash property for which the ANST In determining whether an expense is deductible it must
previously made a section 247(g) election. See also Part be determined whether the expense would be "commonly or
III—Other Information, Question 1, later, for additional customarily" incurred by a hypothetical individual owning the
information that may need to be attached to the return. same property. A cost incurred by an ANST is an allowable
Include on this line the ordinary income recognized on the deduction to the extent that it is excluded from the definition
disposition of property for which the ANST made a section of miscellaneous itemized deductions under section 67(b)
247(g) election. Report on Schedule D (Form 1041-N) the and commonly or customarily would not be incurred by a
capital gain recognized on such disposition. See Section hypothetical individual holding the same property.
247(g) Election Property in the Instructions for Schedule D
(Form 1041-N) for additional information. Include on line 9 the deduction for qualified business
income. For information on how to figure the trust's deduction
If the ANST is reporting global intangible low-taxed for qualified business income, see Form 8995, Qualified
income (GILTI), include it on the attached statement. Business Income Deduction Simplified Computation, and
Complete and attach Form 8992. Form 8995-A, Qualified Business Income Deduction.
Deductions
Line 10—Reserved for Future Use
Allocation of Deductions for Tax-Exempt Income
Don’t enter any information on line 10.
Generally, no deduction is allowed for any expense that is
allocable to tax-exempt income, such as interest on state or
local bonds. Line 11—Exemption

Exceptions. State income taxes and business expenses A trust whose governing instrument requires all income to be
that are allocable to tax-exempt interest are deductible. distributed currently is allowed a $300 exemption, even if it
Expenses that are directly allocable to tax-exempt income distributed amounts other than income during the tax year.
are allocable only to tax-exempt income. A reasonable All other trusts are allowed a $100 exemption.
proportion of expenses indirectly allocable to both
tax-exempt income and other income must be allocated to Tax and Payments
each class of income.
Line 14—Tax
Limitations on Deductions
If the ANST doesn't have a net capital gain or qualified
dividends and has an amount greater than zero on line 13,
Generally, the amount an ANST has "at-risk" limits the loss it check the first box on line 14, multiply the amount on line 13
can deduct in any tax year. Also, section 469 and its by 10% (0.10), and enter the result on line 14.
regulations generally limit losses from passive activities to
the amount of income derived from all passive activities. Schedule D. If the ANST had a net capital gain (or qualified
Similarly, credits from passive activities are generally limited dividends) and any taxable income, complete Part IV of
to the tax attributable to such activities. Schedule D (Form 1041-N), enter the tax (or -0-, if
applicable) from line 28 of Schedule D on line 14, and check
For details on these and other limitations on deductions, the “Schedule D” box.
see Deductions in the Instructions for Form 1041.

-4- Instructions for Form 1041-N (Rev. 12-2022)

- 5 -

Page 5 of 11 Fileid: … s/i1041n/202212/a/xml/cycle02/source 9:19 - 4-Oct-2022

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Line 15—Credits Line 21—Tax Due

Specify the type of credit being claimed or form number and You must pay the tax in full when the return is filed to avoid
attach any required credit forms. If you are claiming more interest charges and possible penalties. Make the check or
than one type of credit, attach a schedule listing the type and money order payable to “United States Treasury.” Write the
amount of each credit claimed. See the Instructions for Form EIN, the tax year, and “Form 1041-N” on the payment.
1041 for details on the credits that may be claimed. Enclose, but don't attach, the payment with Form 1041-N.

Line 17—Reserved for Future Use Part III—Other Information

Don’t enter any information on line 17. Question 1
If you answer “Yes” to this question, attach the following
Line 18—Total Tax information, as necessary.
Assignment of income under section 139G. Attach a
If the ANST owes any additional taxes (for example, copy of the written assignment received from the ANC. See
recapture taxes), include these taxes on line 18. To the left of Income Assignment From a Native Corporation, earlier, for
the entry space, enter the type and amount of the tax. Also how to report the assigned income.
attach to Form 1041-N any forms required to figure these
taxes. See the Instructions for Form 1041 for more details on Property for which the ANC made an election under
additional taxes that may apply. section 247(e). Attach the statement required under section
6039H(e) received from the ANC. If the ANST elects under
If the ANST shows more than one type of additional tax on section 247(g) to defer recognition of income related to any
this line, attach a schedule showing the type and amount of noncash property received from the ANC, clearly identify on
each tax, and include the total of all additional taxes on this the statement for which noncash property the ANST is
line. making the election and describe the property (if the
statement from the ANC does not describe it). Include in
Report on this line of an amended return the additional other income (line 4) the amount of income otherwise
10% tax for the year in which the ANST received a required to be recognized by the ANST.
contribution of noncash property from an ANC, elected to
All other property. Attach a description of the property, the
defer the recognition of income under section 247(g), but
date the ANST received the property, and the FMV of the
disposed of the property within the first tax year subsequent
property on that date.
to the tax year the ANST received the property. The increase
in tax due to the inclusion of the deferred income, which is Revocation of prior section 247(g) election by the
the base amount for the computation of the additional 10% ANST. Attach a copy of the statement attached to the return
tax shown on this line, should be included on line 14. If the on which the ANST made the election. Clearly identify on the
amended return also shows changes to income, deductions, statement the noncash property for which the ANST is
or credits unrelated to the inclusion of the deferred income, revoking the prior election. For noncash property for which
attach a schedule showing the computation of the additional the ANST is revoking the prior election, include on the
tax due only to the inclusion of the deferred income. See also appropriate line of the amended return (and attach any
Part III—Other Information, Question 1, later, for the required supporting schedules) the additional income the
statement to be attached to the amended return. ANST recognized as a result of revoking the election. For
each property for which the ANST both revokes the election
Line 19—Current Year Net 965 Tax Liability Paid and does not recognize additional income, attach a
statement that identifies such property and the reason for not
If the ANST made a payment with respect to a current recognizing additional income.
year net 965 tax liability resulting from an S-corporation
triggering event, enter on line 19 the amount of the payment Early disposition of property for which the ANST made
reported on Form 965-A, Part II, column (k), for the current a section 247(g) election. An early disposition of property
year. for which the ANST made a section 247(g) election is a
disposition that occurs during the first tax year subsequent to
the tax year in which such property was contributed to the
Line 20—Payments
ANST. Attach a copy of the statement attached to the return
Include on line 20 any: on which the ANST made the election. Clearly identify on the
• Estimated tax payments made for the tax year; statement the noncash property the ANST sold or exchanged
• Tax paid with a request for an extension of time to file; during the tax year. For each early disposition of noncash
• Federal income tax withheld (for example, backup property, include on the appropriate line of the amended
withholding); return (and attach any required supporting schedules) the
• Payment made in the current year with respect to a net additional income the ANST recognized. For each property
965 tax liability; and sold or exchanged for which the ANST does not recognize
• Credit for tax paid on undistributed capital gains. Attach additional income, attach a statement that identifies such
Copy B of Form 2439, Notice to Shareholder of Undistributed property and the reason for not recognizing additional
Long-Term Capital Gains. income. See also the instructions for line 18 for how to report
the additional tax due on the sale or exchange of the asset.

Instructions for Form 1041-N (Rev. 12-2022) -5-

- 6 -

Page 6 of 11 Fileid: … s/i1041n/202212/a/xml/cycle02/source 9:19 - 4-Oct-2022

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Question 2 Question 5
The ANST may be required to file Form 3520, Annual Return To make the section 643(e)(3) election to recognize gain on
To Report Transactions With Foreign Trusts and Receipt of property distributed in kind, check the box and complete
Certain Foreign Gifts, if any of the following apply. Schedule D. For more information, see Section 643(e)(3)
• It directly or indirectly transferred property or money to a Election, later.
foreign trust. For this purpose, any U.S. person who created
a foreign trust is considered a transferor.
• It is treated as the owner of any part of the assets of a Schedule D—Capital Gains and
foreign trust under the grantor trust rules. Losses
• It received a distribution from a foreign trust.
General Instructions
Note. An owner of a foreign trust must ensure that the trust
files Form 3520-A, Annual Information Return of Foreign Purpose of Schedule
Trust With a U.S. Owner.
Use Schedule D to report gains and losses from the sale or
Question 3 exchange of capital assets by an ANST.

Check the “Yes” box and enter the name of the foreign Details of each transaction must be reported on this
country if either (1) or (2) below applies. schedule. If there are more transactions than spaces on
1. The ANST owns more than 50% of the stock in any line 1 or 5, you can report the transactions on an attached
corporation that owns one or more foreign bank accounts. statement containing all the same information as Schedule D
2. At any time during the year, the ANST had an interest using a similar format. Enter on Schedule D, lines 1 and 5, as
in or signature or other authority over a bank, securities, or appropriate, the totals from all attached statements for lines 1
other financial account in a foreign country. and 5.

Exception. Check “No” if either of the following applies to the Other Forms You May Have To File
ANST.
• The combined value of the accounts was $10,000 or less Use Form 461, Limitation on Business Losses, to report the
during the whole year. excess business loss that is reported on your noncorporate
• The accounts were with a U.S. military banking facility tax return.
operated by a U.S. financial institution.
Refer to FinCEN Form 114, Report of Foreign Bank and Use Form 965-A, Individual Report of Net 965 Tax
Financial Accounts (FBAR), to see if the ANST is considered Liability, to report the net 965 tax liability.

to have an interest in or signature or other authority over a Use Form 4797, Sales of Business Property, to report the
bank, securities, or other financial account in a foreign following.
country. The sale or exchange of property used in a trade or
•
If you checked “Yes” for Question 3, electronically file business.
FinCEN Form 114 with the Department of the Treasury using • The sale or exchange of depreciable and amortizable
FinCEN's BSA E-Filing System. Because FinCEN Form 114 property.
isn't a tax form, don't file it with Form 1041-N. • The involuntary conversion (other than from casualty or
theft) of property and capital assets held for business or
Go to www.FINCEN.gov for more information. profit.
If you are required to file FinCEN Form 114 but don't, • The disposition of noncapital assets other than inventory
or property held primarily for sale to customers in the ordinary
! you may have to pay a penalty of up to $10,000 (or course of trade or business.
CAUTION more in some cases).
Use Form 4684, Casualties and Thefts, to report
Question 4 involuntary conversions of property due to casualty or theft.
For tax years beginning after December 31, 2015, a domestic
trust, including an ANST, that is formed or availed of to hold Use Form 6781, Gains and Losses From Section 1256
specified foreign financial assets ("a specified domestic Contracts and Straddles, to report gains and losses from
entity") must file Form 8938 with its Form 1041-N for the tax section 1256 contracts and straddles.
year. Form 8938 must be filed each year the value of the
trust's specified foreign financial assets equals or exceeds Use Form 8824, Like-Kind Exchanges, if the ANST made
the reporting threshold. For more information on domestic one or more like-kind exchanges. A like-kind exchange
trusts that are specified domestic entities and the types of occurs when the ANST exchanges business or investment
foreign financial assets that must be reported, see the property for property of a like kind.
Instructions for Form 8938, generally, and in particular, Who
Must File, Specified Domestic Entity, Reporting Thresholds, Use Form 8938, Statement of Specified Foreign Financial
Specified Foreign Financial Assets, Interests in Specified Assets.

Foreign Financial Assets, Assets Not Required To Be Use Form 8992, U.S. Shareholder Calculation of Global
Reported, and Exceptions to Reporting. Intangible Low-Taxed Income (GILTI), to report the ANST’s
GILTI.
An ANST required to file Form 8938 with its Form 1041-N
for the tax year should check "Yes" to Question 4 of Part III of Use Form 8995, Qualified Business Income Deduction
Form 1041-N. Simplified Computation, and Form 8995-A, Qualified

-6-

- 7 -

Page 7 of 11 Fileid: … s/i1041n/202212/a/xml/cycle02/source 9:19 - 4-Oct-2022

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Business Income Deduction, to figure the qualified business party, section 1239 applies to deny capital gains treatment
income deduction. for any gain.

Capital Asset Short-Term or Long-Term

Each item of property held by the ANST is a capital asset, Separate the capital gains and losses according to how long
except for the following. the ANST held or owned the property. The holding period for
• Stock in trade, inventory, or property held primarily for sale short-term capital gains and losses is 1 year or less. The
to customers. holding period for long-term gains and losses is more than 1
• Depreciable or real property used in a trade or business. year.
• Certain patents, inventions, models, or designs (whether
or not patented); secret formulas or processes; or similar To figure the length of the period the ANST held property,
property (see section 1221(a)(3)). begin counting on the day after the ANST acquired the
• Copyrights; literary, musical, or artistic compositions; property and include the day the ANST disposed of it. Use
letters or memoranda; or similar property eligible for the trade dates for the date of acquisition and sale of stocks
copyright protection that the trust received from someone and bonds traded on an exchange or over-the-counter
whose personal efforts created them or for whom they were market.
created in a way (such as by gift) that entitled the trust to the
basis of the previous owner (in the case of letters, For property received by the ANST from an ANC for which
memoranda, or similar property, such property may also be the ANC made an election under section 247(e)(1), the
prepared or produced for the trust). ANST's holding period includes the period the ANC held the
Note. Pursuant to section 1221(b)(3), the trust can elect to property.
treat musical compositions and copyrights in musical works
as capital assets if it sold or exchanged them in a tax year
beginning after May 17, 2006, and acquired the assets under Section 643(e)(3) Election
circumstances entitling it to the basis of the person who
created the property or for whom it was prepared or For in-kind noncash property distributions, a fiduciary may
produced. elect to have the ANST recognize gain or loss in the same
• Accounts or notes receivable acquired in the ordinary manner as if the distributed property had been sold to the
course of a trade or business for services rendered or from beneficiary at its FMV. If the election is made, the
the sale of inventoriable assets or property held primarily for beneficiary's basis of such property is its FMV. This election
sale to customers. applies to all distributions made by the ANST during the tax
• Certain U.S. Government publications not purchased at year and, once made, may be revoked only with IRS
the public sale price. consent.
• Certain "commodities derivative financial instruments" held
by a dealer (see section 1221(a)(6)). Note. Section 267 doesn't allow an ANST to claim a
• Certain hedging transactions entered into in the normal deduction for any loss on property to which a section 643(e)
course of the ANST's trade or business (see section 1221(a) (3) election applies. In addition, when an ANST distributes
(7)). depreciable property, section 1239 applies to deny capital
• Supplies regularly used in the ANST's trade or business. gains treatment for any gain on property to which a section
643(e)(3) election applies.
You may find additional helpful information in Pub. 544,
Sales and Other Dispositions of Assets, and Pub. 551, Basis For more information on making the section 643(e)(3)
of Assets. election, see Part III—Other Information, Question 5, earlier.
Column (d)—Sales Price
Section 247(g) Election Property
Enter either the gross sales price or the net sales price from
Early disposition of section 247(g) property. An early the sale. On sales of stocks and bonds, report the gross
disposition of property for which the ANST made a section amount as reported to the ANST on Form 1099-B, Proceeds
247(g) election is a disposition that occurs during the first tax From Broker and Barter Exchange Transactions, or similar
year subsequent to the tax year in which such property was statement. However, if the ANST was advised that gross
contributed to the ANST. The ANST must amend the tax proceeds less commissions and option premiums were
return for the year in which the ANST received the reported to the IRS, enter only the net amount in column (d).
contributed property to report on line 4 the amount of income
that would have been included in that year but for the
election. Column (e)—Cost or Other Basis

Other dispositions of section 247(g) property. Report Generally, the basis of property acquired by gift is the same
on line 4 the amount of income deferred as a result of making as its basis in the hands of the donor. However, if the FMV of
the section 247(g) election. Also report any additional gain or the property at the time it was transferred to the trust is less
loss on the disposition of property as if there were no section than the transferor's basis, then the FMV is used for
247(g) election, following these Schedule D instructions. determining any loss on disposition.
Note. Section 267 doesn't allow an ANST to claim a loss on
the disposition of property to a related party. In addition, For property received by the ANST from an ANC for which
when an ANST disposes of depreciable property to a related the ANC made an election under section 247(e)(1), the
ANST's basis in the property is the lesser of the adjusted
basis of the ANC in the property immediately before the

Instructions for Form 1041-N (Rev. 12-2022) -7-

- 8 -

Page 8 of 11          Fileid: … s/i1041n/202212/a/xml/cycle02/source                                                                 9:19 - 4-Oct-2022

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Capital Loss Carryover Worksheet
                                                                                                                                     Keep for Your Records
Use this worksheet to figure the ANST's capital loss carryovers from the current tax year to the following tax year if Schedule D, line 12, is a loss and (a) the 
loss on Schedule D, line 11, is more than $3,000; or (b) Form 1041-N, page 1, line 13, is a loss.
1. Enter taxable income (or loss) from Form 1041-N, line 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   1.  
2. Enter loss from Schedule D, line 12, as a positive amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  2.  
3. Enter amount from Form 1041-N, line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             3.  
4. Adjusted taxable income. Combine lines 1, 2, and 3. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       4.  
5. Enter the smaller of line 2 or line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      5.  
Note. If line 4 of Schedule D is a loss, go to line 6; otherwise, enter -0- on line 6 and go to line 10.
6. Enter loss from Schedule D, line 4, as a positive amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 6.  
7. Enter gain, if any, from Schedule D, line 10. If that line is blank or shows a loss, enter -0- . . . . . . . .               7.  
8. Add lines 5 and 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8.  
9. Short-term capital loss carryover. Subtract line 8 from line 6. If zero or less, enter -0-. Enter this loss on the short-term 
capital loss carryover line of next year's Schedule D       . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             9.  
Note. If line 10 of Schedule D is a loss, go to line 10; otherwise, skip lines 10 through 14.
10. Enter loss from Schedule D, line 10, as a positive amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 10.  
11. Enter gain, if any, from Schedule D, line 4. If that line is blank or shows a loss, enter -0-  . . . . . . . .              11.  
12. Subtract line 6 from line 5. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.  
13. Add lines 11 and 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.  
14. Long-term capital loss carryover. Subtract line 13 from line 10. If zero or less, enter -0-. Enter this loss on the long-term 
capital loss carryover line of next year's Schedule D       . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             14.  

contribution, or the FMV of the property immediately before         as a loss in column (f) the amount of allowable exclusion. If 
the contribution.                                                   you are completing line 23 of Schedule D, enter as a positive 
                                                                    number the amount of your allowable exclusion on line 2 of 
If the property was transferred to the ANST and a gift tax          the 28% Rate Gain Worksheet; if you excluded 60% of the 
was paid under chapter 12, then increase the donor's basis          gain, enter  /  of the exclusion; if you excluded 75% of the 2 3
as follows: multiply the amount of the gift tax paid by a           gain, enter  /  of the exclusion. Don’t make an entry for any 1 3
fraction, the numerator of which is the net appreciation in         section 1202 exclusion that is 100% of the gain.
value of the gift (defined below), and the denominator of             For more information about QSB stock, see the 
which is the amount of the gift. For this purpose, the net          Instructions for Schedule D (Form 1041).
appreciation in value of the gift is the amount by which the 
FMV of the gift exceeds the donor's adjusted basis. Then, 
                                                                    Unrecaptured Section 1250 Gain
add the result to the donor's basis.
Adjustments to basis. Before figuring any gain or loss on           Complete the Unrecaptured Section 1250 Gain Worksheet if 
the sale, exchange, or other disposition of property owned by       any of the following apply.
the ANST, adjustments to the property's basis may be                • During the tax year, the ANST sold or otherwise disposed 
required. See Pub. 551 for additional information.                  of section 1250 property (generally, real property that was 
                                                                    depreciated) held more than 1 year.
Column (f)—Gain or (Loss)                                           • The ANST received installment payments during the tax 
                                                                    year for section 1250 property held more than 1 year for 
Make a separate entry in this column for each transaction           which it is reporting gain on the installment method.
reported on lines 1 and 5 and any other lines that apply to the     • The ANST received a Schedule K-1 from an estate or 
ANST. For lines 1 and 5, subtract the amount in column (e)          trust, partnership, or S corporation that shows "unrecaptured 
from the amount in column (d). Enter negative amounts in            section 1250 gain" reportable for the tax year.
parentheses.                                                        • The ANST received a Form 1099-DIV or Form 2439 from a 
                                                                    real estate investment trust or regulated investment company 
                                                                    (including a mutual fund) that reports "unrecaptured section 
Line 23                                                             1250 gain" for the tax year.
                                                                    • The ANST reported a long-term capital gain from the sale 
Add line 18 from the Unrecaptured Section 1250 Gain                 or exchange of an interest in a partnership that owned 
Worksheet and line 7 from the 28% Rate Gain Worksheet.              section 1250 property.
Exclusion of gain on qualified small business (QSB) 
stock. Section 1202 allows you to exclude a portion of the          Instructions for the Unrecaptured Section 1250 
eligible gain on the sale or exchange of certain QSB stock.         Gain Worksheet
How to report.    Report on line 5 of Schedule D the gain 
realized on the sale of QSB stock. Complete all columns as          Lines 1 through 3.                                          If the ANST had more than one property 
indicated. Directly below the line on which you report the          described on line 1, complete lines 1 through 3 for each 
gain, enter in column (a) “Section 1202 exclusion” and enter 

                                                                -8-                              Instructions for Form 1041-N (Rev. 12-2022)

- 9 -

Page 9 of 11         Fileid: … s/i1041n/202212/a/xml/cycle02/source                                                                             9:19 - 4-Oct-2022

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Unrecaptured Section 1250 Gain Worksheet
                                                                                                                                                Keep for Your Records
If the ANST isn't reporting a gain on Form 4797, Sales of Business Property, line 7 (for 2022, or the comparable line for the current tax year), 
skip lines 1 through 9 and go to line 10. 
1. If the ANST has section 1250 property in Part III of Form 4797 for which you made an entry in Part I of Form 4797 (but not on 
Form 6252, Installment Sale Income), enter the smaller of line 22 or line 24 of Form 4797 (for 2022, or the comparable line for 
the current tax year) for that property. If the ANST did not have any such property, go to line 4. If it had more than one such 
property, see instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           1.  
2. Enter the amount from Form 4797, line 26g (for 2022, or the comparable line for the current tax year), for the property for which 
you made an entry on line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              2.  
3. Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       3.  
4. Enter the total unrecaptured section 1250 gain included on line 26 or line 37 of Form(s) 6252 (for 2022, or the comparable line 
for the current tax year) from installment sales of trade or business property held more than 1 year. See instructions  . . . . . . .                                              4.  
5. Enter the total of any amounts reported to the ANST on a Schedule K-1 from a partnership or an S corporation as 
“unrecaptured section 1250 gain” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 5.  
6. Add lines 3 through 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       6.  
7. Enter the smaller of line 6 or the gain from Form 4797, line 7 (for 2022, or the comparable line for 
the current tax year) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     7.  
8. Enter the amount, if any, from Form 4797, line 8 (for 2022, or the comparable line for the current tax 
year) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.  
9. Subtract line 8 from line 7. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               9.  
10. Enter the amount of any gain from the sale or exchange of an interest in a partnership attributable to unrecaptured section 1250 
gain. See instructions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          10.  
11. Enter the total of any amounts reported to the ANST on a Schedule K-1, Form 1099-DIV, or Form 2439 as "unrecaptured 
section 1250 gain" from an estate, trust, real estate investment trust, or mutual fund (or other regulated investment 
company)  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        11.  
12. Enter the total of any unrecaptured section 1250 gain from sales (including installment sales) or other dispositions of section 
1250 property held more than 1 year for which you did not make an entry in Part I of Form 4797 for the year of sale. See 
instructions     . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   12.  
13. Add lines 9 through 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       13.  
14.  If the ANST had any section 1202 gain or collectibles gain or (loss), enter the total of lines 1 
through 4 of the 28% Rate Gain Worksheet. Otherwise, enter -0-  . . . . . . . . . . . . . . . . . . . . . . . .                            14.  
15. Enter the (loss), if any, from Schedule D, line 4. If Schedule D, line 4, is zero or a gain, 
enter -0-  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   15.  
16.  Enter the ANST's long-term capital loss carryover from Schedule D, line 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                             16. (      )
17. Combine lines 14 through 16. If the result is zero or a gain, enter -0-. If the result is a (loss), enter it as a positive 
amount       . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.  
18. Unrecaptured section 1250 gain. Subtract line 17 from line 13. If zero or less, enter -0-. Combine this result with the result on 
line 7 of the 28% Rate Gain Worksheet, if any, and enter that result on Schedule D, line 23 . . . . . . . . . . . . . . . . . . . . . . . . .                                      18.  

property on a separate worksheet. Enter the total of the line 3                1997, and before August 24, 1999, as unrecaptured section 
amounts for all properties on line 3 and go to line 4.                         1250 gain, use only the amount you chose to treat as 
                                                                               unrecaptured section 1250 gain for those payments to 
Line 4.  To figure the amount to enter on line 4, follow the 
                                                                               reduce the total unrecaptured section 1250 gain remaining to 
steps below for each installment sale of trade or business 
                                                                               be reported for the sale. Include this amount on line 4.
property held more than 1 year.
Step 1.    Figure the smaller of (a) the depreciation allowed                  Line 10.          Include on line 10 the ANST's share of the 
or allowable, or (b) the total gain for the sale. This is the                  partnership's unrecaptured section 1250 gain that would 
smaller of line 22 or line 24 of the 2022 Form 4797 (or the                    result if the partnership had transferred all of its section 1250 
comparable lines of Form 4797 for the year of sale) for that                   property in a fully taxable transaction immediately before the 
property.                                                                      ANST sold or exchanged its interest in that partnership. If the 
Step 2.    Reduce the amount figured in Step 1 by any                          ANST recognized less than all of the realized gain, the 
section 1250 ordinary income recapture for the sale. This is                   partnership will be treated as having transferred only a 
the amount from line 26g of the 2022 Form 4797 (or the                         proportionate amount of each section 1250 property.
comparable line of Form 4797 for the year of sale) for that                    Line 12.          An example of an amount to include on line 12 is 
property. The result is the total unrecaptured section 1250                    unrecaptured section 1250 gain from the sale of a vacation 
gain that must be allocated to the installment payments                        home previously used as a rental property but converted to 
received from the sale.                                                        personal use prior to the sale.
Step 3.    Generally, the amount of section 1231 gain on                       Installment sales.                                         To figure the amount to include on 
each installment payment is treated as unrecaptured section                    line 12, follow the steps below for each installment sale of 
1250 gain until the total unrecaptured section 1250 gain                       property held more than 1 year for which you didn’t make an 
figured in Step 2 has been used in full. Figure the amount of                  entry in Part I of Form 4797 for the year of sale.
gain treated as unrecaptured section 1250 gain for                             Step 1.           Figure the smaller of (a) the depreciation allowed 
installment payments received during the tax year as the                       or allowable, or (b) the total gain for the sale. This is the 
smaller of (a) the amount from line 26 or line 37 of the 2022                  smaller of line 22 or line 24 of the 2022 Form 4797 (or 
Form 6252 (or comparable lines for the current tax year),                      comparable lines of Form 4797 for the year of sale) for that 
whichever applies; or (b) the amount of unrecaptured section                   property.
1250 gain remaining to be reported. This amount is generally 
                                                                               Step 2.           Reduce the amount figured in Step 1 by any 
the total unrecaptured section 1250 gain for the sale reduced 
                                                                               section 1250 ordinary income recapture for the sale. This is 
by all gain reported in prior years (excluding section 1250 
                                                                               the amount from line 26g of the 2022 Form 4797 (or the 
ordinary income recapture). However, if you chose not to 
                                                                               comparable line of Form 4797 for the year of sale) for that 
treat all of the gain from payments received after May 6, 

Instructions for Form 1041-N (Rev. 12-2022)                     -9-

- 10 -

Page 10 of 11  Fileid: … s/i1041n/202212/a/xml/cycle02/source                                                 9:19 - 4-Oct-2022

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

28% Rate Gain Worksheet                                                                                       Keep for Your Records
1. Enter the total of all collectibles gain or (loss) from items reported on Schedule D, line 5, column (f)  . . . . . . . . . . . . . . . . . . .                              1.  
2. Enter any of the following as a positive number.
   •  Any section 1202 exclusion reported on Schedule D, line 5, column (f), that is 50% of the gain.
   •  2 3/  of any section 1202 exclusion reported on Schedule D, line 5, column (f), that is 60% of the gain.
   •  1 3/  of any section 1202 exclusion reported on Schedule D, line 5, column (f), that is 75% of the gain.
   Don’t make an entry for any section 1202 exclusion that is 100% of the gain.
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.  
3. Enter the total of all collectibles gain or (loss) from items reported on Schedule D, line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . .                           3.  
4. Enter the total of all collectibles gain from capital gain distributions reported on Schedule D, line 7 . . . . . . . . . . . . . . . . . . . .                              4.  
5. Enter the long-term capital loss carryover from Schedule D, line 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     5. (    )
6. If Schedule D, line 4, is a (loss), enter that (loss) here. Otherwise, enter -0-  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    6.  
7. Combine lines 1 through 6. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              7.  

property. The result is the total unrecaptured section 1250         section 1250 ordinary income recapture for the sale. This is 
gain that must be allocated to the installment payments             the amount from line 26g of Form 4797 (for 2022, or the 
received from the sale.                                             comparable line for the current tax year) for that property. 
Step 3.  Generally, the amount of capital gain on each              The result is the total unrecaptured section 1250 gain for the 
installment payment is treated as unrecaptured section 1250         sale. Include this amount on line 12.
gain until the total unrecaptured section 1250 gain figured in 
Step 2 has been used in full. Figure the amount of gain             28% Rate Gain or (Loss)
treated as unrecaptured section 1250 gain for installment 
payments received during the tax year as the smaller of (a)         Complete the 28% Rate Gain Worksheet if lines 10 and 11 of 
the amount from line 26 or line 37 of the 2022 Form 6252 (or        Schedule D are both greater than zero and the ANST reports 
comparable lines for the current tax year), whichever applies;      in Part II, column (f), either:
or (b) the amount of unrecaptured section 1250 gain                 •          A section 1202 gain on QSB stock, or
remaining to be reported. This amount is generally the total        •          A collectibles gain or (loss).
unrecaptured section 1250 gain for the sale reduced by all 
gain reported in prior years (excluding section 1250 ordinary                  A collectibles gain or loss is any long-term gain or 
income recapture). However, if you chose not to treat all of        deductible long-term loss from the sale or exchange of a 
the gain from payments received after May 6, 1997, and              collectible that is a capital asset.
before August 24, 1999, as unrecaptured section 1250 gain, 
use only the amount you chose to treat as unrecaptured                         Collectibles include works of art, rugs, antiques, metals 
section 1250 gain for those payments to reduce the total            (such as gold, silver, and platinum bullion), gems, stamps, 
unrecaptured section 1250 gain remaining to be reported for         coins, alcoholic beverages, and certain other tangible 
the sale. Include this amount on line 12.                           property.
Other sales or dispositions of section 1250 property. 
For each sale of property held more than 1 year (for which an                  Also, include gain (but not loss) from the sale or exchange 
entry wasn't made in Part I of Form 4797), figure the smaller       of an interest in a partnership, S corporation, or trust held for 
of (a) the depreciation allowed or allowable, or (b) the total      more than 1 year and attributable to unrealized appreciation 
gain for the sale. This is the smaller of line 22 or line 24 of     of collectibles. For details, see Regulations section 1.1(h)-1. 
Form 4797 (for 2022, or the comparable line for the current         Also, attach the statement required under Regulations 
tax year) for that property. Next, reduce that amount by any        section 1.1(h)-1(e).

                                                                -10-

- 11 -

Page 11 of 11 Fileid: … s/i1041n/202212/a/xml/cycle02/source 9:19 - 4-Oct-2022

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

election was in effect), but that have not, in fact, been
Schedule K—Distributions to
distributed in any prior year.
Beneficiaries
Tier II distributions are excluded from the gross income of the
Use this schedule to report the type and amount of beneficiary.
distributions that were made to each beneficiary. A copy of Tier III Distributions (Section 646(e)(3))
this schedule must be furnished to the sponsoring ANC. The
sponsoring ANC, not the ANST, provides information to the These are distributions considered to have been made by the
beneficiaries regarding distributions. Distributions for each sponsoring ANC with respect to its stock.
year are considered to have been made in the following Tier III distributions are taxable to beneficiaries as dividends,
order. to the extent of current or accumulated earnings and profits
of the sponsoring ANC (after adjustment for distributions
Tier I Distributions (Section 646(e)(1)) made by the sponsoring ANC during the year). Section
These are distributions from the ANST to the extent of the 643(e) applies for purposes of determining the amount of a
ANST's taxable income, reduced by any income tax paid by Tier III distribution of property (other than cash).
the ANST on that income, and increased by any tax-exempt
interest income. Tier IV Distributions (Section 646(e)(4))
Tier I distributions are excluded from the gross income of the These are distributions of any amounts that remain after
beneficiary. applying the above rules. They are considered as amounts in
Tier II Distributions (Section 646(e)(2)) excess of distributable net income for the year.
These are distributions of amounts that would have been Tier Tier IV distributions are excluded from the gross income of
I distributions in prior years (during which a section 646 the beneficiary.

Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the
United States. You are required to give us the information. We need it to ensure that you are complying with these laws and to
allow us to figure and collect the right amount of tax. You aren't required to provide the information requested on a form that is
subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. Books or records relating to a
form or its instructions must be retained as long as their contents may become material in the administration of any Internal
Revenue law. The time needed to complete and file this form will vary depending on individual circumstances. The estimated
average time is:

Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 hr., 30 min.
Learning about the law or the form . . . . . . . . . . . . . . . . . . . . . . 2 hr., 39 min.
Preparing the form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 hr., 12 min.
Copying, assembling, and sending the form to the IRS . . . . . . . . . 16 min.

If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we
would be happy to hear from you. You can send us comments from IRS.gov/FormComments. Or you can send your comments
to Internal Revenue Service, Tax Forms and Publications, 1111 Constitution Ave. NW, IR-6526, Washington, DC 20224. Don’t
send the tax form to this address. Instead, see Where To File, earlier.

Instructions for Form 1041-N (Rev. 12-2022) -11-

PDF file checksum: 270747388

(Plugin #1/9.12/13.0)