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                                                                                                                       Department of the Treasury
                                                                                                                       Internal Revenue Service
2022

Instructions for Form 1041 

and Schedules A, B, G, J, 

and K-1

U.S. Income Tax Return for Estates and Trusts

Contents                                                                Page   Contents                                                                  Page
What's New   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1  Schedule B—Income Distribution Deduction . . . . . . .                      29
Reminders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2  Schedule G—Tax Computation and Payments . . . . .                           31
Photographs of Missing Children . . . . . . . . . . . . . . . .             2  Net Investment Income Tax (NIIT)              . . . . . . . . . . . . . .   36
The Taxpayer Advocate Service (TAS) . . . . . . . . . . . .                 2  Other Information     . . . . . . . . . . . . . . . . . . . . . . . . . .   36
How To Get Forms and Publications               . . . . . . . . . . . . .   3  Schedule J (Form 1041)—Accumulation 
General Instructions    . . . . . . . . . . . . . . . . . . . . . . . . .   3  Distribution for Certain Complex Trusts                     . . . . . . .   38
Purpose of Form . . . . . . . . . . . . . . . . . . . . . . . . . . . .     3  Schedule K-1 (Form 1041)—Beneficiary's Share of 
Income Taxation of Trusts and Decedents'                                       Income, Deductions, Credits, etc.                   . . . . . . . . . . .   41
Estates      . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3  Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Abusive Trust Arrangements . . . . . . . . . . . . . . . . . . .            3  Future Developments
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4  For the latest information about developments related to 
Who Must File   . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5  Form 1041 and Schedules A, B, G, J, K-1 and its 
Electronic Filing . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8  instructions, such as legislation enacted after they were 
When To File  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8  published, go to IRS.gov/Form1041.

Period Covered    . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8  What's New
Where To File . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
Who Must Sign . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     9  Due date of return.       Calendar year estates and trusts must 
                                                                               file Form 1041 by April 18, 2023. The due date is April 18, 
Accounting Methods . . . . . . . . . . . . . . . . . . . . . . . . .        9  instead of April 15, because of the Emancipation Day holiday 
Accounting Periods    . . . . . . . . . . . . . . . . . . . . . . . . .     10 in the District of Columbia—even if you don’t live in the 
Rounding Off to Whole Dollars . . . . . . . . . . . . . . . . .             10 District of Columbia.
Estimated Tax   . . . . . . . . . . . . . . . . . . . . . . . . . . . .     10 Capital gains and qualified dividends.                For tax year 2022, 
Interest and Penalties . . . . . . . . . . . . . . . . . . . . . . .        10 the 20% maximum capital gains rate applies to estates and 
Other Forms That May Be Required . . . . . . . . . . . . .                  11 trusts with income above $13,700. The 0% and 15% rates 
Additional Information . . . . . . . . . . . . . . . . . . . . . . .        13 apply to certain threshold amounts. The 0% rate applies to 
                                                                               amounts up to $2,800. The 15% rate applies to amounts over 
Assembly and Attachments . . . . . . . . . . . . . . . . . . .              13 $2,800 and up to $13,700.
Special Reporting Instructions . . . . . . . . . . . . . . . . .            13
                                                                               Bankruptcy estate filing threshold.               For tax year 2022, the 
Specific Instructions   . . . . . . . . . . . . . . . . . . . . . . . .     18 requirement to file a return for a bankruptcy estate applies 
Name of Estate or Trust       . . . . . . . . . . . . . . . . . . . . .     18 only if gross income is at least $12,950.
Name and Title of Fiduciary . . . . . . . . . . . . . . . . . . .           18 Qualified disability trust.       For tax year 2022, a qualified 
Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   18 disability trust can claim an exemption of up to $4,400. This 
A. Type of Entity . . . . . . . . . . . . . . . . . . . . . . . . . . .     18 amount is not subject to phaseout.
B. Number of Schedules K-1 Attached . . . . . . . . . . .                   19 Form 8978 Worksheet.            A Form 8978 
C. Employer Identification Number . . . . . . . . . . . . . .               19 Worksheet—Schedule G, Part I, Line 8 has been added to 
D. Date Entity Created      . . . . . . . . . . . . . . . . . . . . . .     19 the instructions to calculate the amount due when there is a 
E. Nonexempt Charitable and Split-Interest                                     negative amount from Form 8978, line 14, that was not used 
Trusts      . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   19 to reduce Schedule G, line 3, to zero, and you have chapter 1 
                                                                               taxes and/or tax and interest from Form 8621.
F. Initial Return, Amended Return, etc. . . . . . . . . . . .               20
G. Section 645 Election . . . . . . . . . . . . . . . . . . . . . .         20 Mortgage insurance premiums.                The election to deduct 
                                                                               qualified mortgage insurance premiums you paid under a 
Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    21 mortgage insurance contract issued after December 31, 
Deductions   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    22 2006, in connection with qualified residence acquisition debt 
Limitations on Deductions . . . . . . . . . . . . . . . . . . . .           23 that was secured by a principal or secondary residence 
Tax and Payments      . . . . . . . . . . . . . . . . . . . . . . . . .     28 doesn’t apply for tax years beginning after December 31, 
                                                                               2021.
Schedule A—Charitable Deduction               . . . . . . . . . . . . .     28

Jan 11, 2023                                                            Cat. No. 11372D

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Qualified sick and family leave credits. Generally, the Item F. Net operating loss (NOL) carryback. If an
credits for qualified sick and family leave wages have amended return is filed for an NOL carryback, check the Net
expired. However, qualified sick and family leave wages paid operating loss carryback box in item F. See Amended
in 2022 for leave taken after March 31, 2020, and before Return, later, for complete information.
October 1, 2021, may be eligible to claim the credits in 2022.
Item G. Section 645 election. If the estate has made a
Advanced manufacturing production credit. Section section 645 election the executor must check item G and
13502 of the Inflation Reduction Act of 2022 (IRA 22) created provide the taxpayer identification number (TIN) of the
the advanced manufacturing production credit for certain electing trust with the highest total asset value in the box
components produced and sold after 2022. This may be provided.
applicable to fiscal year filers. See Form 7207 and its The executor must also attach a statement to Form 1041
instructions and section 45X. providing the following information for each electing trust
(including the electing trust provided in item G): (a) the name
Reminders of the electing trust, (b) the TIN of the electing trust, and (c)
• Review a copy of the will or trust instrument, including any the name and address of the trustee of the electing trust.
amendments or codicils, before preparing an estate's or
trust's return. Form 1041 e-filing. When e-filing Form 1041, use either
• We encourage you to use Form 1041-V, Payment Form 8453-FE, U.S. Estate or Trust Declaration for an IRS
Voucher, to accompany your payment of a balance of tax e-file Return, or Form 8879-F, IRS e-file Signature
due on Form 1041, particularly if your payment is made by Authorization for Form 1041.
check or money order. Note. Form 8879-F can only be associated with a single
Form 1041. Form 8879-F can no longer be used with multiple
Net operating loss (NOL) carryback. Generally, an NOL
Forms 1041.
arising in a tax year beginning in 2021 or later may not be
carried back and instead must be carried forward indefinitely. For more information about e-filing returns through MeF,
However, farming losses arising in tax years beginning in see Pub. 4164, Modernized e-File (MeF) Guide for Software
2021 or later may be carried back 2 years and carried Developers and Transmitters.
forward indefinitely.
Photographs of Missing Children
For special rules for NOLs arising in 2018, 2019 or 2020,
see Pub. 536, Net Operating Losses (NOLs) for Individuals, The Internal Revenue Service is a proud partner with the
Estates, and Trusts, for more information. National Center for Missing & Exploited Children®
(NCMEC). Photographs of missing children selected by the
Section 965. Section 965(a) inclusion amounts are not Center may appear in instructions on pages that would
applicable for tax year 2021 and later years. However, otherwise be blank. You can help bring these children home
section 965 may still apply to certain estates and trusts by looking at the photographs and calling 1-800-THE-LOST
(including the S portion of electing small business trusts (1-800-843-5678) if you recognize a child.
(ESBTs)) where a section 965(h) or section 965(i) election
has been made. The Taxpayer Advocate Service (TAS)
Section 1061 reporting. Section 1061 recharacterizes
The TAS Is Here To Help You
certain long-term capital gains of applicable partnership
interests held by an estate or trust as short-term capital What is TAS?
gains. See Section 1061 Reporting Guidance FAQs.
TAS is an independent organization within the IRS that
Excess deductions on termination. Under Final helps taxpayers and protects taxpayer rights. TAS strives to
Regulations - TD9918, each excess deduction on termination ensure that every taxpayer is treated fairly and that you know
of an estate or trust retains its separate character as an and understand your rights under the Taxpayer Bill of Rights.
amount allowed in arriving at adjusted gross income (AGI), a
non-miscellaneous itemized deduction, or a miscellaneous
itemized deduction. What Can TAS Do for You?

See Box 11, Code A Excess Deductions on TAS can help you if your tax problem is causing a financial
Termination—Section 67(e) Expenses and Box 11, Code B difficulty, you’ve tried and been unable to resolve your issue
Excess Deductions on Termination—Non-Miscellaneous with the IRS, or you believe an IRS system, process, or
Itemized Deductions, later, for more information. procedure just isn't working as it should. And the service is
Qualified Opportunity Investment. With the exception of free. If you qualify for TAS assistance, you will be assigned to
grantor trusts, if you held a qualified investment in a qualified one advocate who will work with you throughout the process
opportunity fund (QOF) at any time during the year, you must and will do everything possible to resolve your issue. TAS
file your return with Form 8997, Initial and Annual Statement can help you if:
of Qualified Opportunity Fund (QOF) Investments, attached • Your problem is causing financial difficulty for you, your
to your return. For more information, see Form 8997 and its family, or your business;
instructions. • You face (or your business is facing) an immediate threat
of adverse action; or
Extension of time to file. The extension of time to file an You’ve tried to contact the IRS, but no one has responded,
estate (other than a bankruptcy estate) or trust return is 5 /1 2 •
or the IRS hasn’t responded by the date promised.
months.
Item A. Type of entity. On page 1 of Form 1041, item A,
taxpayers should select more than one box, when
appropriate, to reflect the type of entity.

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How Can You Reach TAS? Income Taxation of Trusts and
TAS has offices in every state, the District of Columbia, and Decedents' Estates
Puerto Rico. To find your advocate’s number: A trust or a decedent's estate is a separate legal entity for
• Go to TaxpayerAdvocate.IRS.gov/Contact-Us federal tax purposes. A decedent's estate comes into
• Download Publication 1546, The Taxpayer Advocate existence at the time of death of an individual. A trust may be
Service Is Your Voice at the IRS, available at IRS.gov/ created during an individual's life (inter vivos) or at the time of
FormsPubs. If you do not have internet access, you can call their death under a will (testamentary). If the trust instrument
the IRS toll-free at 800-TAX-FORM (800-829-3676) and ask contains certain provisions, then the person creating the trust
for a copy of Publication 1546; (the grantor) is treated as the owner of the trust's assets.
• Check your local directory; or Such a trust is a grantor type trust. See Grantor Type Trusts,
• Call TAS toll-free at 877-777-4778. later, under Special Reporting Instructions.
A trust or decedent's estate figures its gross income in
How Can You Learn About Your Taxpayer Rights? much the same manner as an individual. Most deductions
The Taxpayer Bill of Rights describes 10 basic rights that all and credits allowed to individuals are also allowed to estates
taxpayers have when dealing with the IRS. The TAS website, and trusts. However, there is one major distinction. A trust or
TaxpayerAdvocate.IRS.gov, can help you understand what decedent's estate is allowed an income distribution
these rights mean to you and how they apply. These are deduction for distributions to beneficiaries. To figure this
your rights. Know them. deduction, the fiduciary must complete Schedule B. The
income distribution deduction determines the amount of any
distributions taxed to the beneficiaries.
How Else Does TAS Help Taxpayers?
For this reason, a trust or decedent's estate is sometimes
TAS works to resolve large-scale problems that affect many referred to as a “pass-through entity.” The beneficiary, and
taxpayers. If you know of one of these broad issues, please not the trust or decedent's estate, pays income tax on their
report it to TAS at IRS.gov/SAMS. Be sure to not include any distributive share of income. Schedule K-1 (Form 1041) is
personal taxpayer information. used to notify the beneficiaries of the amounts to be included
on their income tax returns.
How To Get Forms and Publications
Before preparing Form 1041, the fiduciary must figure the
Internet. You can access the IRS website 24 hours a accounting income of the estate or trust under the will or trust
day, 7 days a week, at IRS.gov to: instrument and applicable local law to determine the amount,
if any, of income that is required to be distributed, because
• Download forms, including talking tax forms, instructions, the income distribution deduction is based, in part, on that
and publications; amount.
• Order IRS products;
• Use the online Internal Revenue Code, regulations, and Abusive Trust Arrangements
other official guidance; Certain trust arrangements claim to reduce or eliminate
• Research your tax questions; federal taxes in ways that are not permitted under the law.
• Search publications by topic or keyword; Abusive trust arrangements are typically promoted by the
• Apply for an employer identification number (EIN); and promise of tax benefits with no meaningful change in the
• Sign up to receive local and national tax news by email. taxpayer's control over or benefit from the taxpayer's income
or assets. The promised benefits may include reduction or
Tax forms and publications. The estate or trust can elimination of income subject to tax; deductions for personal
download or print all of the forms and publications it may expenses paid by the trust; depreciation deductions of an
need on IRS.gov/FormsPubs. Otherwise, the estate or trust owner's personal residence and furnishings; a stepped-up
can go to IRS.gov/OrderForms to place an order and have basis for property transferred to the trust; the reduction or
forms mailed to it. The IRS will process your order for forms elimination of self-employment taxes; and the reduction or
and publications as soon as possible. elimination of gift and estate taxes. These promised benefits
are inconsistent with the tax rules applicable to trust
arrangements.
General Instructions
Abusive trust arrangements often use trusts to hide the
Purpose of Form true ownership of assets and income or to disguise the
The fiduciary of a domestic decedent's estate, trust, or substance of transactions. These arrangements frequently
bankruptcy estate uses Form 1041 to report: involve more than one trust, each holding different assets of
• The income, deductions, gains, losses, etc., of the estate the taxpayer (for example, the taxpayer's business, business
or trust; equipment, home, automobile, etc.). Some trusts may hold
• The income that is either accumulated or held for future interests in other trusts, purport to involve charities, or are
distribution or distributed currently to the beneficiaries; foreign trusts. Funds may flow from one trust to another trust
• Any income tax liability of the estate or trust; by way of rental agreements, fees for services, purchase
• Employment taxes on wages paid to household agreements, and distributions.
employees; and Some of the abusive trust arrangements that have been
• Net Investment Income Tax (NIIT). See Schedule G, Part I, identified include unincorporated business trusts (or
line 5, and the Instructions for Form 8960. organizations), equipment or service trusts, family residence
trusts, charitable trusts, and final trusts. In each of these
trusts, the original owner of the assets nominally subject to

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the trust effectively retains the authority to cause financial Income in respect of a decedent (IRD). When completing
benefits of the trust to be directly or indirectly returned or Form 1041, you must take into account any items that are
made available to the owner. For example, the trustee may IRD.
be the promoter, a relative, or a friend of the owner who
simply carries out the directions of the owner whether or not In general, IRD is income that a decedent was entitled to
permitted by the terms of the trust. receive but that was not properly includible in the decedent's
final income tax return under the decedent's method of
When trusts are used for legitimate business, family, or accounting.
estate planning purposes, either the trust, the beneficiary, or IRD includes:
the transferor of assets to the trust will pay the tax on income • All accrued income of a decedent who reported their
generated by the trust property. Trusts can't be used to income on the cash method of accounting,
transform a taxpayer's personal, living, or educational • Income accrued solely because of the decedent's death in
expenses into deductible items, and can't seek to avoid tax the case of a decedent who reported their income on the
liability by ignoring either the true ownership of income and accrual method of accounting, and
assets or the true substance of transactions. Therefore, the • Income to which the decedent had a contingent claim at
tax results promised by the promoters of abusive trust the time of their death.
arrangements are not allowable under the law, and the Some examples of IRD for a decedent who kept their
participants in and promoters of these arrangements may be books on the cash method are:
subject to civil or criminal penalties in appropriate cases. • Deferred salary payments that are payable to the
For more details, including the legal principles that control decedent's estate,
the proper tax treatment of these abusive trust arrangements, • Uncollected interest on U.S. savings bonds,
see Notice 97-24, 1997-1 C.B. 409. • Proceeds from the completed sale of farm produce, and
• The portion of a lump-sum distribution to the beneficiary of
For additional information about abusive tax a decedent's individual retirement arrangement (IRA) that
arrangements, visit the IRS website at IRS.gov and type equals the balance in the IRA at the time of the owner's
“Abusive Trusts” in the search box. death. This includes unrealized appreciation and income
accrued to that date, less the aggregate amount of the
Definitions owner's nondeductible contributions to the IRA. Such
amounts are included in the beneficiary's gross income in the
Adjusted gross income (AGI). Compute the AGI of an tax year that the distribution is received.
estate or a non-grantor trust by subtracting the following from
total income on line 9 of page 1. The IRD has the same character it would have had if the
decedent had lived and received such amount.
1. The administration costs of the estate or trust (the total
Deductions and credits in respect of a decedent. The
of lines 12, 14, and 15a to the extent they are costs incurred
following deductions and credits, when paid by the
in the administration of the estate or trust) that wouldn't have
decedent's estate, are allowed on Form 1041 even though
been incurred if the property were not held by the estate or
they were not allowable on the decedent's final income tax
trust.
return.
2. The income distribution deduction (line 18). • Business expenses deductible under section 162.
3. The amount of the exemption (line 21). • Interest deductible under section 163.
4. The net operating loss deduction (NOLD) claimed on • Taxes deductible under section 164.
line 15b. • Percentage depletion allowed under section 611.
• Foreign tax credit.
Electing small business trust (ESBT). Compute the For more information on IRD, see section 691 and Pub.
AGI of the S portion of an ESBT in the same manner as an 559, Survivors, Executors, and Administrators.
individual taxpayer, except that administration costs allocable
to the S portion (to the extent they are costs incurred in the Income required to be distributed currently. Income
administration of the trust that wouldn't have been incurred if required to be distributed currently is income that is required
the property were not held by the estate or trust) shall be under the terms of the governing instrument and applicable
deducted in arriving at AGI. local law to be distributed in the year it is received. The
fiduciary must be under a duty to distribute the income
Beneficiary. A beneficiary includes an heir, a legatee, or a currently, even if the actual distribution is not made until after
devisee. the close of the trust's tax year. See Regulations section
Decedent's estate. The decedent's estate is an entity that 1.651(a)-2.
is formed at the time of an individual's death and is generally Fiduciary. A fiduciary is a trustee of a trust, or an executor,
charged with gathering the decedent's assets, paying the executrix, administrator, administratrix, personal
decedent's debts and expenses, and distributing the representative, or person in possession of property of a
remaining assets. Generally, the estate consists of all the decedent's estate.
property, real or personal, tangible or intangible, wherever
situated, that the decedent owned an interest in at death. Note. Any reference in these instructions to “you” means the
Distributable net income (DNI). The income distribution fiduciary of the estate or trust.
deduction allowable to estates and trusts for amounts paid, Trust. A trust is an arrangement created either by a will or by
credited, or required to be distributed to beneficiaries is an inter vivos declaration by which trustees take title to
limited to DNI. This amount, which is figured on Schedule B, property for the purpose of protecting or conserving it for the
line 7, is also used to determine how much of an amount beneficiaries under the ordinary rules applied in chancery or
paid, credited, or required to be distributed to a beneficiary probate courts.
will be includible in their gross income.

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Revocable living trust. A revocable living trust is an • Was in existence on August 20, 1996,
arrangement created by a written agreement or declaration • Was treated as a domestic trust on August 19, 1996, and
during the life of an individual and can be changed or ended • Elected to continue to be treated as a domestic trust.
at any time during the individual's life. A revocable living trust A trust that isn't a domestic trust is treated as a foreign
is generally created to manage and distribute property. Many trust. If you are the trustee of a foreign trust, file Form
people use this type of trust instead of (or in addition to) a 1040-NR instead of Form 1041. Also, a foreign trust with a
will. U.S. owner generally must file Form 3520-A, Annual
Because this type of trust is revocable, it is treated as a Information Return of Foreign Trust With a U.S. Owner.
grantor type trust for tax purposes. See Grantor Type Trusts
under Special Reporting Instructions, later, for special filing If a domestic trust becomes a foreign trust, it is treated
instructions that apply to grantor trusts. under section 684 as having transferred all of its assets to a
foreign trust, except to the extent a grantor or another person
Be sure to read Optional Filing Methods for Certain is treated as the owner of the trust when the trust becomes a
TIP Grantor Type Trusts, later. Generally, most people foreign trust.
that have revocable living trusts will be able to use
Optional Method 1. This method is the easiest and least Grantor Type Trusts
burdensome way to meet your obligations. If all or any portion of a trust is a grantor type trust, then that
trust or portion of a trust must follow the special reporting
Who Must File requirements discussed later under Special Reporting
Instructions. See Grantor Type Trust, under Specific
Decedent's Estate Instructions, later, for more details on what makes a trust a
The fiduciary (or one of the joint fiduciaries) must file Form grantor type trust.
1041 for a domestic estate that has:
Note. A trust may be part grantor trust and part “other” type
1. Gross income for the tax year of $600 or more; of trust, for example, simple or complex, or ESBT.
2. A beneficiary who is a nonresident alien; or
Qualified subchapter S trusts (QSSTs). QSSTs must
3. If you held a qualified investment in a qualified follow the special reporting requirements for these trusts,
opportunity fund (QOF) at any time during the year, you must discussed later under Special Reporting Instructions.
file your return with Form 8997 attached. See the Form 8997
instructions.
Special Rule for Certain Revocable Trusts
An estate is a domestic estate if it isn't a foreign estate. A
foreign estate is one the income of which is from sources Section 645 provides that if both the executor (if any) of an
outside the United States that isn't effectively connected with estate (the related estate) and the trustee of a qualified
the conduct of a U.S. trade or business and isn't includible in revocable trust (QRT) elect the treatment in section 645, the
gross income. If you are the fiduciary of a foreign estate, file trust must be treated and taxed as part of the related estate
Form 1040-NR, U.S. Nonresident Alien Income Tax Return, during the election period. This election may be made by a
instead of Form 1041. QRT even if no executor is appointed for the related estate.

Trust In general, Form 8855, Election To Treat a Qualified
The fiduciary (or one of the joint fiduciaries) must file Form Revocable Trust as Part of an Estate, must be filed by the
1041 for a domestic trust taxable under section 641 that has: due date for Form 1041 for the first tax year of the related
estate. This applies even if the combined related estate and
1. Any taxable income for the tax year; electing trust don't have sufficient income to be required to
2. Gross income of $600 or more (regardless of taxable file Form 1041. However, if the estate is granted an extension
income); of time to file Form 1041 for its first tax year, the due date for
3. A beneficiary who is a nonresident alien; or Form 8855 is the extended due date.

4. If you held a qualified investment in a QOF at any time Once made, the election is irrevocable.
during the year, you must file your return with Form 8997
attached. See the Form 8997 instructions. Qualified revocable trusts (QRTs). In general, a QRT is
any trust (or part of a trust) that, on the day the decedent
Two or more trusts are treated as one trust if the trusts died, was treated as owned by the decedent because the
have substantially the same grantor(s) and substantially the decedent held the power to revoke the trust as described in
same primary beneficiary(ies) and a principal purpose of section 676. An electing trust is a QRT for which a section
such trusts is avoidance of tax. This provision applies only to 645 election has been made.
that portion of the trust that is attributable to contributions to
corpus made after March 1, 1984. Election period. The election period is the period of time
during which an electing trust is treated as part of its related
A trust is a domestic trust if: estate.
• A U.S. court is able to exercise primary supervision over
the administration of the trust (court test), and The election period begins on the date of the decedent's
• One or more U.S. persons have the authority to control all death and terminates on the earlier of:
substantial decisions of the trust (control test). • The day on which the electing trust and related estate, if
any, distribute all of their assets; or
See Regulations section 301.7701-7 for more information • The day before the applicable date.
on the court and control tests. To determine the applicable date, first determine whether a
Also treated as a domestic trust is a trust (other than a Form 706, United States Estate (and Generation-Skipping
trust treated as wholly owned by the grantor) that: Transfer) Tax Return, is required to be filed as a result of the

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decedent's death. If no Form 706 is required to be filed, the made a section 645 election. For item G, the filing trustee
applicable date is 2 years after the date of the decedent's must provide the TIN of the electing trust with the highest
death. If Form 706 is required, the applicable date is the later total asset value. The electing trust is entitled to a single
of 2 years after the date of the decedent's death or 6 months $600 personal exemption on returns filed for the election
after the final determination of liability for estate tax. For period.
additional information, see Regulations section 1.645-1(f). If there is more than one electing trust, the trusts must
Taxpayer identification number (TIN). All QRTs must appoint one trustee as the filing trustee. Form 1041 is filed
obtain a new TIN following the death of the decedent whether under the name and TIN of the filing trustee's trust. A
or not a section 645 election is made. (Use Form W-9, statement providing the same information about the electing
Request for Taxpayer Identification Number and trusts (except the filing trust) that is listed under If there is an
Certification, to notify payers of the new TIN.) executor above must be attached to these Forms 1041. All
electing trusts must choose the same tax year.
An electing trust that continues after the termination of the
election period doesn't need to obtain a new TIN following If there is more than one electing trust, the filing trustee is
the termination unless: responsible for ensuring that the filing trust's share of the
• An executor was appointed and agreed to the election combined tax liability is paid.
after the electing trust made a valid section 645 election, and For additional information on filing requirements when
the electing trust filed a return as an estate under the trust's there is no executor, including application of the separate
TIN; or share rule, see Regulations section 1.645-1(e). For
• No executor was appointed and the QRT was the filing information on the requirements when an executor is
trust (as explained later). appointed after an election is made and the executor doesn't
A related estate that continues after the termination of the agree to the election, see below.
election period doesn't need to obtain a new TIN. Responsibilities of the trustee when there is an
For more information about TINs, including trusts with executor (or there isn't an executor and the trustee isn't
multiple owners, see Regulations sections 1.645-1 and the filing trustee). When there is an executor (or there isn't
301.6109-1(a). an executor and the trustee isn't the filing trustee), the trustee
of an electing trust is responsible for the following during the
General procedures for completing Form 1041 during election period.
the election period. • To timely provide the executor with all the trust information
If there is an executor. The following rules apply to filing necessary to allow the executor to file a complete, accurate,
Form 1041 while the election is in effect. and timely Form 1041.
• The executor of the related estate is responsible for filing • To ensure that the electing trust's share of the combined
Form 1041 for the estate and all electing trusts. The return is tax liability is paid.
filed under the name and TIN of the related estate. Be sure to The trustee does not file a Form 1041 during the election
check the Decedent's estate box at the top of Form 1041 and period (except for a final return if the trust terminates during
item G if the estate has made a section 645 election. The the election period, as explained later).
executor continues to file Form 1041 during the election
period even if the estate distributes all of its assets before the Procedure for completing Form 1041 for the year in
end of the election period. which the election terminates.
• The Form 1041 includes all items of income, deduction, If there is an executor. If there is an executor, the Form
and credit for the estate and all electing trusts. 1041 filed under the name and TIN of the related estate for
• For item G, the executor must provide the TIN of the the tax year in which the election terminates includes (a) the
electing trust with the highest total asset value. items of income, deduction, and credit for the related estate
• The executor must attach a statement to Form 1041 for its entire tax year; and (b) the income, deductions, and
providing the following information for each electing trust credits for the electing trust for the period that ends with the
(including the electing trust provided in item G): (a) the name last day of the election period. If the estate won't continue
of the electing trust, (b) the TIN of the electing trust, and (c) after the close of the tax year, indicate that this Form 1041 is
the name and address of the trustee of the electing trust. a final return.
• The related estate and the electing trust are treated as At the end of the last day of the election period, the
separate shares for purposes of computing DNI and applying combined entity is deemed to distribute the share comprising
distribution provisions. Also, each of those shares can the electing trust to a new trust. All items of income, including
contain two or more separate shares. For more information, net capital gains, that are attributable to the share comprising
see Separate share rule, later, and Regulations section the electing trust are included in the calculation of DNI of the
1.645-1(e)(2)(iii). electing trust and treated as distributed. The distribution rules
• The executor is responsible for insuring that the estate's of sections 661 and 662 apply to this deemed distribution.
share of the combined tax obligation is paid. The combined entity is entitled to an income distribution
For additional information, including treatment of transfers deduction for this deemed distribution, and the "new" trust
between shares and charitable contribution deductions, see must include its share of the distribution in its income. See
Regulations section 1.645-1(e). Regulations sections 1.645-1(e)(2)(iii) and 1.645-1(h) for
more information.
If there isn't an executor. If no executor has been
appointed for the related estate, the trustee of the electing If the electing trust continues in existence after the
trust files Form 1041 as if it were an estate. File using the TIN termination of the election period, the trustee must file Form
that the QRT obtained after the death of the decedent. The 1041 under the name and TIN of the trust, using the calendar
trustee can choose a fiscal year as the trust's tax year during year as its accounting period, if it is otherwise required to file.
the election period. Be sure to check the Decedent's estate
box at the top of Form 1041 and item G if the filing trust has

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If there isn't an executor. If there isn't an executor, the periods covered by the returns. Also, attach a statement to
following rules apply to filing Form 1041 for the tax year in the amended Forms 1041 identifying the name and TIN of
which the election period ends. the related estate, and the name and address of the
• The tax year of the electing trust closes on the last day of executor. Check the Final return box on the amended return
the election period, and the Form 1041 filed for that tax year for the tax year that ends with the appointment of the
includes all items of income, deduction, and credit for the executor. Except for this amended return, all returns filed for
electing trust for the period beginning with the first day of the the combined entity after the appointment of the executor
tax year and ending with the last day of the election period. must be filed under the name and TIN of the related estate.
• The deemed distribution rules discussed above apply. If the election terminates as the result of a later appointed
• Check the box to indicate that this Form 1041 is a final executor, the executor of the related estate must file Forms
return. 1041 under the name and TIN of the related estate for all tax
• If the filing trust continues after the termination of the years of the related estate beginning with the decedent's
election period, the trustee must obtain a new TIN. If the trust death. The electing trust's election period and tax year
meets the filing requirements, the trustee must file a Form terminate the day before the appointment of the executor.
1041 under the new TIN for the period beginning with the day The trustee isn't required to amend any of the returns filed by
after the close of the election period and, in general, ending the electing trust for the period prior to the appointment of the
December 31 of that year. executor. The trust must file a final Form 1041 following the
Responsibilities of the trustee when there is an instructions above for completing Form 1041 in the year in
executor (or there isn't an executor and the trustee isn't which the election terminates and there is no executor.
the filing trustee). In addition to the requirements listed Termination of the trust during the election period. If
above under this same heading, the trustee is responsible for an electing trust terminates during the election period, the
the following. trustee of that trust must file a final Form 1041 by completing
• If the trust will not continue after the close of the election the entity information (using the trust's EIN), checking the
period, the trustee must file a Form 1041 under the name and Final return box, and signing and dating the form. Don't
TIN of the trust. Complete the entity information and items A, report items of income, deduction, and credit. These items
C, D, and F. Indicate in item F that this is a final return. Don't are reported on the related estate's return.
report any items of income, deduction, or credit.
• If the trust will continue after the close of the election Alaska Native Settlement Trusts
period, the trustee must file a Form 1041 for the trust for the The trustee of an Alaska Native Settlement Trust may elect
tax year beginning the day after the close of the election the special tax treatment for the trust and its beneficiaries
period and, in general, ending December 31 of that year. Use provided for in section 646. The election must be made by
the TIN obtained after the decedent's death. Follow the the due date (including extensions) for filing the trust's tax
general rules for completing the return. return for its first tax year ending after June 7, 2001. Don't
Special filing instructions. use Form 1041. Use Form 1041-N, U.S. Income Tax Return
When the election isn't made by the due date of the for Electing Alaska Native Settlement Trusts, to make the
QRT's Form 1041. If the section 645 election hasn't been election. Additionally, Form 1041-N is the trust's income tax
made by the time the QRT's first income tax return would be return and satisfies the section 6039H information reporting
due for the tax year beginning with the decedent's death, but requirement for the trust.
the trustee and executor (if any) have decided to make a
section 645 election, then the QRT isn't required to file a Bankruptcy Estate
Form 1041 for the short tax year beginning with the The bankruptcy trustee or debtor-in- possession must file
decedent's death and ending on December 31 of that year. Form 1041 for the estate of an individual involved in
However, if a valid election isn't subsequently made, the bankruptcy proceedings under chapter 7 or 11 of title 11 of
QRT may be subject to penalties and interest for failure to file the United States Code if the estate has gross income for the
and failure to pay. tax year of $12,950 or more. See Bankruptcy Estates, later,
If the QRT files a Form 1041 for this short period, and a for details.
valid section 645 election is subsequently made, then the
trustee must file an amended Form 1041 for the electing Charitable Remainder Trusts (CRTs)
trust, excluding all items of income, deduction, and credit of A section 664 CRT doesn’t file Form 1041. Instead, a CRT
the electing trust. These amounts are then included on the files Form 5227, Split-Interest Trust Information Return. If the
first Form 1041 filed by the executor for the related estate (or CRT has any unrelated business taxable income, it must also
the filing trustee for the electing trust filing as an estate). file Form 4720, Return of Certain Excise Taxes Under
Later appointed executor. If an executor for the related Chapters 41 and 42 of the Internal Revenue Code.
estate isn't appointed until after the trustee has made a valid
section 645 election, the executor must agree to the trustee's Common Trust Funds
election and they must file a revised Form 8855 within 90 Don't file Form 1041 for a common trust fund maintained by a
days of the appointment of the executor. If the executor bank. Instead, the fund may use Form 1065, U.S. Return of
doesn't agree to the election, the election terminates as of Partnership Income, for its return. For more details, see
the date of appointment of the executor. section 584 and Regulations section 1.6032-1.
If the executor agrees to the election, the trustee must
amend any Form 1041 filed under the name and TIN of the ESBTs
electing trust for the period beginning with the decedent's ESBTs file Form 1041. However, see Electing Small
death. The amended returns are still filed under the name Business Trusts (ESBTs), later, for a discussion of the
and TIN of the electing trust, and they must include the items special reporting requirements for these trusts.
of income, deduction, and credit for the related estate for the

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Pooled Income Funds Help is available online at e-services or through the e-Help
Pooled income funds file Form 1041. See Pooled Income Desk at 866-255-0654 (512-416-7750 for international calls),
Funds, later, for the special reporting requirements for these Monday through Friday, 6:30 a.m.–6:00 p.m. (Central time).
trusts. Additionally, pooled income funds must file Form Frequently asked questions and Online Tutorials are
5227. available to answer questions or to guide users through the
application process.
Qualified Funeral Trusts If you file Form 1041 electronically, you may sign the
Trustees of pre-need funeral trusts who elect treatment under return electronically by using a personal identification number
section 685 file Form 1041-QFT, U.S. Income Tax Return for (PIN). See Form 8879-F for details.
Qualified Funeral Trusts. All other pre-need funeral trusts, Form 8879-F can only be associated with a single
see Grantor Type Trusts, later, for Form 1041 reporting ! Form 1041. Form 8879-F can't be used with multiple
requirements. CAUTION Forms 1041.

Qualified Settlement Funds Form 1041 may also be e-filed using Form 8453-FE.
The trustee of a designated or qualified settlement fund
(QSF) must generally file Form 1120-SF, U.S. Income Tax For more information about e-filing returns through MeF,
Return for Settlement Funds, instead of Form 1041. see Pub. 4164.
Special election. If a QSF has only one transferor, the If Form 1041 is e-filed and there is a balance due, the
transferor may elect to treat the QSF as a grantor type trust. fiduciary may authorize an electronic funds withdrawal with
the return.
To make the grantor trust election, the transferor must
attach an election statement to a timely filed Form 1041, Private Delivery Services (PDSs)
including extensions, that the administrator files for the QSF
for the tax year in which the settlement fund is established. If You can use certain PDSs designated by the IRS to meet the
Form 1041 isn't filed because Optional Method 1 or 2 “timely mailing as timely filing/paying” rule for tax returns and
(described later) was chosen, attach the election statement payments. Go to IRS.gov/PDS for the current list of
to a timely filed income tax return, including extensions, of designated services.
the transferor for the tax year in which the settlement fund is The PDS can tell you how to get written proof of the
established. mailing date.
Election statement. The election statement may be
made separately or, if filed with Form 1041, on the For the IRS mailing address to use if you’re using a PDS,
attachment described under Grantor Type Trusts, later. At go to IRS.gov/PDSstreetAddresses.
the top of the election statement, enter “Section 1.468B-1(k) PDSs can't deliver items to P.O. boxes. You must
Election” and include the transferor's: ! use the U.S. Postal Service to mail any item to an
• Name, CAUTION IRS P.O. box address.
• Address,
• TIN, and When To File
• A statement that they will treat the QSF as a grantor type
For calendar year estates and trusts, file Form 1041 and
trust.
Schedule(s) K-1 by April 18, 2023.
Widely Held Fixed Investment Trust (WHFITs) For fiscal year estates and trusts, file Form 1041 by the
Trustees and middlemen of WHFITs don't file Form 1041. 15th day of the 4th month following the close of the tax year.
Instead, they report all items of gross income and proceeds For example, an estate that has a tax year that ends on June
on the appropriate Form 1099. For the definition of a WHFIT, 30, 2023, must file Form 1041 by October 15, 2023. If the
see Regulations section 1.671-5(b)(22). A tax information due date falls on a Saturday, Sunday, or legal holiday, file on
statement that includes the information given to the IRS on the next business day.
Forms 1099, as well as additional information identified in
Regulations section 1.671-5(e), must be given to trust Extension of Time To File
interest holders. See the General Instructions for Certain If more time is needed to file the estate or trust return, use
Information Returns for more information. Form 7004, Application for Automatic Extension of Time To
File Certain Business Income Tax, Information, and Other
Electronic Filing Returns, to apply for an automatic 5 / -month extension of 1 2
Qualified fiduciaries or transmitters may be able to file Form time to file.
1041 and related schedules electronically. To become an
e-file provider complete the following steps. Period Covered
1. Create an IRS e-Services account. File the 2022 return for calendar year 2022 and fiscal years
beginning in 2022 and ending in 2023. If the return is for a
2. Submit your e-file provider application online. fiscal year or a short tax year (less than 12 months), fill in the
3. Pass a suitability check. tax year space at the top of the form.
The online application process takes 4–6 weeks to The 2022 Form 1041 may also be used for a tax year
complete. beginning in 2023 if:
Note. Existing e-file providers must now use -Services to e 1. The estate or trust has a tax year of less than 12
make account updates. months that begins and ends in 2023, and
2. The 2023 Form 1041 isn't available by the time the
estate or trust is required to file its tax return. However, the

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Where To File
For all estates and trusts, including charitable and split-interest trusts (other than CRTs).

                                                                     THEN use this address if you...
  IF you are located in...             Are not enclosing a check or money order:       Are enclosing a check or money order:
Connecticut, Delaware, District of 
Columbia, Georgia, Illinois, Indiana, 
Kentucky, Maine, Maryland, 
Massachusetts, Michigan, New           Department of the Treasury                Department of the Treasury
Hampshire, New Jersey, New York, North  Internal Revenue Service                 Internal Revenue Service 
Carolina, Ohio, Pennsylvania, Rhode    Kansas City, MO 64999-0048                Kansas City, MO 64999-0148
Island, South Carolina, Tennessee, 
Vermont, Virginia, West Virginia, 
Wisconsin
Alabama, Alaska, Arizona, Arkansas, 
California, Colorado, Florida, Hawaii, 
Idaho, Iowa, Kansas, Louisiana,        Department of the Treasury                Department of the Treasury
Minnesota, Mississippi, Missouri,      Internal Revenue Service                  Internal Revenue Service 
Montana, Nebraska, Nevada, New         Ogden, UT 84201-0048                      Ogden, UT 84201-0148
Mexico, North Dakota, Oklahoma, 
Oregon, South Dakota, Texas, Utah, 
Washington, Wyoming
A foreign country or U.S. possession   Internal Revenue Service                  Internal Revenue Service 
                                       P.O. Box 409101                           P.O. Box 409101
                                       Ogden, UT 84409                           Ogden, UT 84409

estate or trust must show its 2023 tax year on the 2022 Form         authorization applies only to the individual whose signature 
1041 and incorporate any tax law changes that are effective          appears in the Paid Preparer Use Only area of the estate's or 
for tax years beginning after 2022.                                  trust's return. It doesn't apply to the firm, if any, shown in that 
                                                                     section.
Who Must Sign                                                          If the “Yes” box is checked, the fiduciary is authorizing the 
                                                                     IRS to call the paid preparer to answer any questions that 
Fiduciary                                                            may arise during the processing of the estate's or trust's 
The fiduciary, or an authorized representative, must sign            return. The fiduciary is also authorizing the paid preparer to:
Form 1041. If there are joint fiduciaries, only one is required      • Give the IRS any information that is missing from the 
to sign the return.                                                  estate's or trust's return;
  A financial institution that submitted estimated tax               • Call the IRS for information about the processing of the 
payments for trusts for which it is the trustee must enter its       estate's or trust's return or the status of its refund or 
EIN in the space provided for the EIN of the fiduciary. Don't        payment(s); and
enter the EIN of the trust. For this purpose, a financial            • Respond to certain IRS notices that the fiduciary has 
institution is one that maintains a Treasury Tax and Loan            shared with the preparer about math errors, offsets, and 
(TT&L) account. If you are an attorney or other individual           return preparation. The notices won't be sent to the preparer.
functioning in a fiduciary capacity, leave this space blank.           The fiduciary isn't authorizing the paid preparer to receive 
Don't enter your individual social security number (SSN).            any refund check, bind the estate or trust to anything 
                                                                     (including any additional tax liability), or otherwise represent 
Paid Preparer                                                        the estate or trust before the IRS.
Generally, anyone who is paid to prepare a tax return must 
sign the return and fill in the other blanks in the Paid Preparer      The authorization will automatically end no later than the 
Use Only area of the return.                                         due date (without regard to extensions) for filing the estate's 
                                                                     or trust's 2023 tax return. If the fiduciary wants to expand the 
  The person required to sign the return must:                       paid preparer's authorization or revoke the authorization 
• Complete the required preparer information,                        before it ends, see Pub. 947, Practice Before the IRS and 
• Sign it in the space provided for the preparer's signature (a      Power of Attorney.
facsimile signature is acceptable), and
• Give you a copy of the return for your records.                    Accounting Methods
  If you, as fiduciary, fill in Form 1041, leave the Paid            Figure taxable income using the method of accounting 
Preparer Use Only space blank.                                       regularly used in keeping the estate's or trust's books and 
                                                                     records. Generally, permissible methods include the cash 
  If someone prepares this return and doesn't charge you, 
                                                                     method, the accrual method, or any other method authorized 
that person should not sign the return.
                                                                     by the Internal Revenue Code. In all cases, the method used 
Paid Preparer Authorization                                          must clearly reflect income.
If the fiduciary wants to allow the IRS to discuss the estate's        Generally, the estate or trust may change its accounting 
or trust's 2022 tax return with the paid preparer who signed it,     method (for income as a whole or for any material item) only 
check the “Yes” box in the signature area of the return. This        by getting consent on Form 3115, Application for Change in 

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Accounting Method. For more information, see Pub. 538, 2. A decedent's estate for any tax year ending before the
Accounting Periods and Methods. date that is 2 years after the decedent's death; or
3. A trust that was treated as owned by the decedent if
Accounting Periods the trust will receive the residue of the decedent's estate
For a decedent's estate, the moment of death determines the under the will (or, if no will is admitted to probate, is the trust
end of the decedent's tax year and the beginning of the primarily responsible for paying debts, taxes, and expenses
estate's tax year. As executor or administrator, you choose of administration) for any tax year ending before the date that
the estate's tax period when you file its first income tax is 2 years after the decedent's death.
return. The estate's first tax year may be any period of 12
months or less that ends on the last day of a month. If you For more information, see Form 1041-ES, Estimated
select the last day of any month other than December, you Income Tax for Estates and Trusts.
are adopting a fiscal tax year.
Electronic Deposits
To change the accounting period of an estate, use Form A financial institution that has been designated as an
1128, Application To Adopt, Change, or Retain a Tax Year. authorized federal tax depository, and acts as a fiduciary for
Generally, a trust must adopt a calendar year. The at least 200 taxable trusts that are required to pay estimated
following trusts are exempt from this requirement. tax, is required to deposit the estimated tax payments
• A trust that is exempt from tax under section 501(a). electronically using the Electronic Federal Tax Payment
• A charitable trust described in section 4947(a)(1). System (EFTPS).
• A trust that is treated as wholly owned by a grantor under A fiduciary that isn't required to make electronic deposits
the rules of sections 671 through 679. of estimated tax on behalf of a trust or an estate may
voluntarily participate in EFTPS. To enroll in or get more
Rounding Off to Whole Dollars
information about EFTPS, visit the EFTPS website at
You may round off cents to whole dollars on the estate's or EFTPS.gov or call 800-555-4477. To contact EFTPS using
trust's return and schedules. If you do round to whole dollars, Telecommunications Relay Services (TRS) for people who
you must round all amounts. To round, drop amounts under are deaf, hard of hearing, or have a speech disability, dial
50 cents and increase amounts from 50 to 99 cents to the 711 and then provide the TRS assistant the 800-555-4477
next dollar. For example, $1.39 becomes $1 and $2.50 number above or 800-733-4829. Also, see Pub. 966,
becomes $3. Electronic Federal Tax Payment System: A Guide to Getting
If you have to add two or more amounts to figure the Started.
amount to enter on a line, include cents when adding the Depositing on time. For a deposit using EFTPS to be on
amounts and round off only the total. time, the deposit must be submitted by 8:00 p.m. Eastern
If you are entering amounts that include cents, make sure time the day before the due date of the deposit.
to include the decimal point. There is no cents column on the
Section 643(g) Election
form.
Fiduciaries of trusts that pay estimated tax may elect under
Estimated Tax section 643(g) to have any portion of their estimated tax
Generally, an estate or trust must pay estimated income tax payments allocated to any of the beneficiaries.
for 2023 if it expects to owe, after subtracting any withholding The fiduciary of a decedent's estate may make a section
and credits, at least $1,000 in tax, and it expects the 643(g) election only for the final year of the estate.
withholding and credits to be less than the smaller of:
1. 90% of the tax shown on the 2023 tax return (66 / % of 2 3 Make the election by filing Form 1041-T, Allocation of
the tax if the estate or trust qualifies as a farmer or Estimated Tax Payments to Beneficiaries, by the 65th day
fisherman); or after the close of the estate's or trust's tax year. Then, include
that amount in box 13, code A, of Schedule K-1 (Form 1041)
2. 100% of the tax shown on the 2022 tax return (110% for any beneficiaries for whom it was elected.
of that amount if the estate's or trust's AGI on that return is
more than $150,000, and less than / of gross income for 2 3 If Form 1041-T was timely filed, the payments are treated
2022 and 2023 is from farming or fishing). as paid or credited to the beneficiary on the last day of the tax
However, if a return was not filed for 2022 or that return year and must be included as an other amount paid, credited,
didn't cover a full 12 months, item 2 doesn't apply. or required to be distributed on Form 1041, Schedule B,
line 10. See the instructions for Schedule B, line 10, later.
For this purpose, include household employment taxes in
the tax shown on the tax return, but only if either of the Failure to make a timely election will result in the
following is true. estimated tax payments not being transferred to the
• The estate or trust will have federal income tax withheld for beneficiary(ies) even if you entered the amount on
2023 (see the instructions for Schedule G, Part II, line 14). Schedule K-1.
• The estate or trust would be required to make estimated See the instructions for line Schedule G, Part II, line 11, for
tax payments for 2023 even if it didn't include household more details.
employment taxes when figuring estimated tax.
Interest and Penalties
Exceptions
Estimated tax payments aren't required from: Interest
1. An estate of a domestic decedent or a domestic trust Interest is charged on taxes not paid by the due date, even if
that had no tax liability for the full 12-month 2022 tax year; an extension of time to file is granted.

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Interest is also charged on penalties imposed for failure to withheld aren't collected or withheld, or these taxes aren't
file, negligence, fraud, substantial valuation misstatements, paid. These taxes are generally reported on Forms 720, 941,
substantial understatements of tax, and reportable 943, 944, or 945. The trust fund recovery penalty may be
transaction understatements. Interest is charged on the imposed on all persons who are determined by the IRS to
penalty from the due date of the return (including have been responsible for collecting, accounting for, or
extensions). The interest charge is figured at a rate paying over these taxes, and who acted willfully in not doing
determined under section 6621. so. The penalty is equal to the unpaid trust fund tax. See the
Instructions for Form 720; Pub. 15 (Circular E), Employer's
Late Filing of Return Tax Guide; or Pub. 51 (Circular A), Agricultural Employer's
The law provides a penalty of 5% of the tax due for each Tax Guide, for more details, including the definition of
month, or part of a month, for which a return isn't filed up to a responsible persons.
maximum of 25% of the tax due (15% for each month, or part
of a month, up to a maximum of 75% if the failure to file is Other Penalties
fraudulent). If the return is more than 60 days late, the Other penalties can be imposed for negligence, substantial
minimum penalty is the smaller of $450 or the tax due. understatement of tax, and fraud. See Pub. 17, Your Federal
Income Tax, for details on these penalties.
The penalty won't be imposed if you can show that the
failure to file on time was due to reasonable cause. If you Other Forms That May Be Required
receive a notice about penalty and interest after you file this Form W-2, Wage and Tax Statement, and Form W-3,
return, send us an explanation and we will determine if you Transmittal of Wage and Tax Statements.
meet reasonable-cause criteria. Don't attach an explanation
when you file Form 1041. Form 56, Notice Concerning Fiduciary Relationship. You
must notify the IRS of the creation or termination of a
Late Payment of Tax fiduciary relationship. You may use Form 56 to provide this
Generally, the penalty for not paying tax when due is / of 1 2 notice to the IRS.
1% of the unpaid amount for each month or part of a month it Form 461, Limitation on Business Losses.
remains unpaid. The maximum penalty is 25% of the unpaid
amount. The penalty applies to any unpaid tax on the return. Form 706, United States Estate (and Generation-Skipping
Any penalty is in addition to interest charges on late Transfer) Tax Return, or Form 706-NA, United States Estate
payments. (and Generation-Skipping Transfer) Tax Return, Estate of
nonresident not a citizen of the United States.
If you include interest on either of these penalties
TIP with your payment, identify and enter these amounts Form 706-GS(D), Generation-Skipping Transfer Tax
in the bottom margin of Form 1041, page 1. Don't Return for Distributions.
include the interest or penalty amount in the balance of tax
Form 706-GS(D-1), Notification of Distribution From a
due on line 28.
Generation-Skipping Trust.
Failure To Provide Information Timely Form 706-GS(T), Generation-Skipping Transfer Tax
Return for Terminations.
You must provide Schedule K-1 (Form 1041), on or before
the day you are required to file Form 1041, to each Form 709, United States Gift (and Generation-Skipping
beneficiary who receives a distribution of property or an Transfer) Tax Return.
allocation of an item of the estate.
Form 720, Quarterly Federal Excise Tax Return. Use
For each failure to provide Schedule K-1 to a beneficiary Form 720 to report environmental excise taxes,
when due and each failure to include on Schedule K-1 all the communications and air transportation taxes, fuel taxes,
information required to be shown (or the inclusion of incorrect luxury tax on passenger vehicles, manufacturers' taxes, ship
information), a $290 penalty may be imposed with regard to passenger tax, and certain other excise taxes.
each Schedule K-1 for which a failure occurs. The maximum See Trust Fund Recovery Penalty, earlier.
penalty is $3,532,500 for all such failures during a calendar
year. If the requirement to report information is intentionally CAUTION!
disregarded, each $290 penalty is increased to $580 or, if
greater, 10% of the aggregate amount of items required to be Form 926, Return by a U.S. Transferor of Property to a
reported, and the $3,532,500 maximum doesn't apply. Foreign Corporation. Use this form to report certain
information required under section 6038B.
The penalty won't be imposed if the fiduciary can show
that not providing information timely was due to reasonable Form 940, Employer's Annual Federal Unemployment
cause and not due to willful neglect. (FUTA) Tax Return. The estate or trust may be liable for
FUTA tax and may have to file Form 940 if it paid wages of
Underpaid Estimated Tax $1,500 or more in any calendar quarter during the calendar
If the fiduciary underpaid estimated tax, use Form 2210, year (or the preceding calendar year) or one or more
Underpayment of Estimated Tax by Individuals, Estates, and employees worked for the estate or trust for some part of a
Trusts, to figure any penalty. Enter the amount of any penalty day in any 20 different weeks during the calendar year (or the
on Form 1041, line 27. preceding calendar year).
Form 941, Employer's QUARTERLY Federal Tax Return.
Trust Fund Recovery Penalty Employers must file this form quarterly to report income tax
This penalty may apply if certain excise, income, social withheld on wages and employer and employee social
security, and Medicare taxes that must be collected or security and Medicare taxes. Certain small employers must

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file Form 944, Employer's ANNUAL Federal Tax Return, substantial understatement of tax. Form 8275 is also used for
instead of Form 941. For more information, see the disclosures relating to preparer penalties for
Instructions for Form 944. Agricultural employers must file understatements due to unrealistic positions or disregard of
Form 943, Employer's Annual Federal Tax Return for rules.
Agricultural Employees, instead of Form 941, to report
income tax withheld and employer and employee social Form 8275-R, Regulation Disclosure Statement, is used to
security and Medicare taxes on farmworkers. disclose any item on a tax return for which a position has
been taken that is contrary to Treasury regulations.
See Trust Fund Recovery Penalty, earlier.
Form 8288, U.S. Withholding Tax Return for Certain
CAUTION! Dispositions by Foreign Persons, and Form 8288-A,
Statement of Withholding on Dispositions by Foreign
Form 945, Annual Return of Withheld Federal Income Tax. Persons. Use these forms to report and transmit withheld tax
Use this form to report income tax withheld from nonpayroll on the sale of U.S. real property by a foreign person. Also,
payments, including pensions, annuities, IRAs, gambling use these forms to report and transmit tax withheld from
winnings, and backup withholding. amounts distributed to a foreign beneficiary from a “U.S. real
See Trust Fund Recovery Penalty, earlier. property interest account” that a domestic estate or trust is
required to establish under Regulations section 1.1445-5(c)
CAUTION! (1)(iii).
Form 8300, Report of Cash Payments Over $10,000
Form 965-A, Individual Report of Net 965 Tax Liability.
Received in a Trade or Business. Generally, this form is used
Form 982, Reduction of Tax Attributes Due to Discharge to report the receipt of more than $10,000 in cash or foreign
of Indebtedness (and Section 1082 Basis Adjustment). currency in one transaction (or a series of related
transactions).
Form 1040, U.S. Individual Income Tax Return.
Form 8855, Election To Treat a Qualified Revocable Trust
Form 1040-NR, U.S. Nonresident Alien Income Tax as Part of an Estate. This election allows a QRT to be treated
Return. and taxed (for income tax purposes) as part of its related
Form 1040-SR, U.S. Tax Return for Seniors. estate during the election period.
Form 1041-A, U.S. Information Return Trust Accumulation Form 8865, Return of U.S. Persons With Respect to
of Charitable Amounts. Certain Foreign Partnerships. The estate or trust may have to
file Form 8865 if it:
Form 1042, Annual Withholding Tax Return for U.S.
Source Income of Foreign Persons; and Form 1042-S, 1. Controlled a foreign partnership (that is, owned more
Foreign Person's U.S. Source Income Subject to than a 50% direct or indirect interest in a foreign partnership);
Withholding. Use these forms to report and transmit withheld 2. Owned at least a 10% direct or indirect interest in a
tax on payments or distributions made to nonresident alien foreign partnership while U.S. persons controlled that
individuals, foreign partnerships, or foreign corporations to partnership;
the extent such payments or distributions constitute gross 3. Had an acquisition, disposition, or change in
income from sources within the United States that isn't proportional interest in a foreign partnership that:
effectively connected with a U.S. trade or business. For more
information, see sections 1441 and 1442, and Pub. 515, a. Increased its direct interest to at least 10%,
Withholding of Tax on Nonresident Aliens and Foreign b. Reduced its direct interest of at least 10% to less than
Entities. 10%, or
Forms 1099-A, B, INT, LTC, MISC, NEC, OID, Q, R, S, c. Changed its direct interest by at least a 10% interest;
and SA. You may have to file these information returns to or
report acquisitions or abandonments of secured property; 4. Contributed property to a foreign partnership in
proceeds from broker and barter exchange transactions; exchange for a partnership interest if:
interest payments; payments of long-term care and a. Immediately after the contribution, the estate or trust
accelerated death benefits; miscellaneous income payments; owned, directly or indirectly, at least a 10% interest in the
nonemployee compensation; original issue discount; foreign partnership; or
distributions from Coverdell ESAs; distributions from b. The fair market value (FMV) of the property the estate
pensions, annuities, retirement or profit-sharing plans, IRAs or trust contributed to the foreign partnership, for a
(including SEPs, SIMPLEs, Roth IRAs, Roth Conversions, partnership interest, when added to other contributions of
and IRA recharacterizations), insurance contracts, etc.; property made to the foreign partnership during the
proceeds from real estate transactions; and distributions preceding 12-month period, exceeds $100,000.
from an HSA, Archer MSA, or Medicare Advantage MSA.
Also, the estate or trust may have to file Form 8865 to
Also, use certain of these returns to report amounts report certain dispositions by a foreign partnership of
received as a nominee on behalf of another person, except property it previously contributed to that foreign partnership if
amounts reported to beneficiaries on Schedule K-1 (Form it was a partner at the time of the disposition.
1041).
For more details, including penalties for failing to file Form
Form 8275, Disclosure Statement. File Form 8275 to 8865, see Form 8865 and its separate instructions.
disclose items or positions, except those contrary to a
regulation, that are not otherwise adequately disclosed on a Form 8886, Reportable Transaction Disclosure
tax return. The disclosure is made to avoid parts of the Statement. Use Form 8886 to disclose information for each
accuracy-related penalty imposed for disregard of rules or reportable transaction in which the trust participated, directly

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or indirectly. Form 8886 must be filed for each tax year that • Pub. 4895, Tax Treatment of Property Acquired From a
the federal income tax liability of the estate or trust is affected Decedent Dying in 2010.
by its participation in the transaction. The estate or trust may
have to pay a penalty if it has a requirement to file Form 8886 Assembly and Attachments
but you fail to file it. The following are reportable transactions. Assemble any schedules, forms, and attachments behind
• Any transaction that is the same as or substantially similar Form 1041 in the following order.
to tax avoidance transactions identified by the IRS as listed 1. Schedule I (Form 1041).
transactions.
• Any transaction offered under conditions of confidentiality 2. Schedule D (Form 1041).
and for which the estate or trust paid a minimum fee 3. Form 4952.
(confidential transaction). 4. Schedule H (Form 1040).
• Any transaction for which the estate or trust or a related 5. Form 3800.
party has contractual protection against disallowance of the
tax benefits (transaction with contractual protection). 6. Form 4136.
• Any transaction resulting in a loss of at least $2 million in 7. Form 8855.
any single year or $4 million in any combination of years 8. Form 8960.
($50,000 in any single year if the loss is generated by a
section 988 transaction) (loss transactions). 9. All other schedules and forms.
• Any transaction substantially similar to one of the types of 10. All attachments.
transactions identified by the IRS as a transaction of interest.
Attachments
See the Instructions for Form 8886 for more details and
If you need more space on the forms or schedules, attach
exceptions.
separate sheets. Use the same size and format as on the
Form 8918, Material Advisor Disclosure Statement. printed forms. But show the totals on the printed forms.
Material advisors who provide material aid, assistance, or
advice on organizing, managing, promoting, selling, Attach these separate sheets after all the schedules and
implementing, insuring, or carrying out any reportable forms. Enter the estate's or trust's EIN on each sheet.
transaction, and who directly or indirectly receive or expect to
receive a minimum fee, must use Form 8918 to disclose any Don't file a copy of the decedent's will or the trust
reportable transaction under Regulations section instrument unless the IRS requests it.
301.6111-3. For more information, see Form 8918 and its
instructions. Special Reporting Instructions
Form 8938, Statement of Specified Foreign Financial Grantor type trusts, the S portion of ESBTs, and bankruptcy
Assets. estates all have reporting requirements that are significantly
Form 8960, Net Investment Income Tax—Individuals, different than other subchapter J trusts and decedents’
Estates, and Trusts. estates. Additionally, grantor type trusts have optional filing
methods available. Pooled income funds have many similar
Form 8971, Information Regarding Beneficiaries Acquiring reporting requirements that other subchapter J trusts (other
Property From a Decedent. than grantor type trusts and ESBTs) have but there are some
Form 8975, Country-by-Country Report. very important differences. These reporting differences and
optional filing methods are discussed below by entity.
Schedule A (Form 8975), Tax Jurisdiction and Constituent
Entity Information. Grantor Type Trusts
Form 8978, Partner's Additional Reporting Year Tax. A trust is a grantor trust if the grantor retains certain powers
or ownership benefits. This can also apply to only a portion of
Form 8990, Limitation on Business Interest Expense a trust. See Grantor Type Trust, later, for details on what
Under Section 163(j). makes a trust a grantor trust.
Form 8992, U.S. Shareholder Calculation of Global
Intangible Low-Taxed Income (GILTI). In general, a grantor trust is ignored for income tax
purposes and all of the income, deductions, etc., are treated
Form 8995, Qualified Business Income Deduction as belonging directly to the grantor. This also applies to any
Simplified Computation. portion of a trust that is treated as a grantor trust.
Form 8995-A, Qualified Business Income Deduction.
Note. If only a portion of the trust is a grantor type trust,
Form 8997, Initial and Annual Statement of Qualified indicate both grantor trust and the other type of trust, for
Opportunity Fund (QOF) Investments. example, simple or complex trust, as the type of entities
checked in Section A on page 1 of Form 1041.
Additional Information
The following instructions apply only to grantor type
The following publications may assist you in preparing Form ! trusts that are not using an optional filing method.
1041. CAUTION
• Pub. 550, Investment Income and Expenses.
• Pub. 559, Survivors, Executors, and Administrators. How to report. If the entire trust is a grantor trust, fill in only
• Pub. 590-A, Contributions to Individual Retirement the entity information of Form 1041. Don't show any dollar
Arrangements (IRAs). amounts on the form itself; show dollar amounts only on an
• Pub. 590-B, Distributions from Individual Retirement attachment to the form. Don't use Schedule K-1 (Form 1041)
Arrangements (IRAs). as the attachment.

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If only part of the trust is a grantor type trust, the portion of • The spouses file their income tax return jointly for that tax
the income, deductions, etc., that is allocable to the year.
non-grantor part of the trust is reported on Form 1041, under
normal reporting rules. The amounts that are allocable Generally, if a trust is treated as owned by two or more
directly to the grantor are shown only on an attachment to the grantors or other persons, the trustee may choose Optional
form. Don't use Schedule K-1 (Form 1041) as the Method 3 as the trust's method of reporting instead of filing
attachment. However, Schedule K-1 is used to reflect any Form 1041.
income distributed from the portion of the trust that isn't
taxable directly to the grantor or owner. Once you choose the trust's filing method, you must follow
the rules under Changing filing methods, later, if you want to
The fiduciary must give the grantor (owner) of the trust a change to another method.
copy of the attachment.
Attachment. On the attachment, show: Exceptions. The following trusts can't report using the
• The name, identifying number, and address of the optional filing methods.
person(s) to whom the income is taxable; • A common trust fund (as defined in section 584(a)).
• The income of the trust that is taxable to the grantor or • A foreign trust or a trust that has any of its assets located
another person under sections 671 through 678—report the outside the United States.
income in the same detail as it would be reported on the • A QSST (as defined in section 1361(d)(3)).
grantor's return had it been received directly by the grantor; • A trust all of which is treated as owned by one grantor or
and one other person whose tax year is other than a calendar
• Any deductions, credits, or elections that apply to this year.
income. Report these deductions and credits in the same • A trust all of which is treated as owned by one or more
detail as they would be reported on the grantor's return had grantors or other persons, one of which isn't a U.S. person.
they been received directly by the grantor. • A trust all of which is treated as owned by one or more
grantors or other persons if at least one grantor or other
The income taxable to the grantor or another person under
person is an exempt recipient for information reporting
sections 671 through 678 and the deductions and credits that
purposes, unless at least one grantor or other person isn't an
apply to that income must be reported by that person on their
exempt recipient and the trustee reports without treating any
own income tax return.
of the grantors or other persons as exempt recipients.
Example. The John Doe Trust is a grantor type trust.
During the year, the trust sold 100 shares of ABC stock for Optional Method 1. For a trust treated as owned by one
$1,010 in which it had a basis of $10 and 200 shares of XYZ grantor or by one other person, the trustee must give all
stock for $10 in which it had a $1,020 basis. payers of income during the tax year the name and TIN of the
grantor or other person treated as the owner of the trust and
The trust doesn't report these transactions on Form 1041. the address of the trust. This method may be used only if the
Instead, a schedule is attached to the Form 1041 showing owner of the trust provides the trustee with a signed Form
each stock transaction separately and in the same detail as W-9. In addition, unless the grantor or other person treated
John Doe (grantor and owner) will need to report these as owner of the trust is the trustee or a co-trustee of the trust,
transactions on his Form 8949, Sales and Other Dispositions the trustee must give the grantor or other person treated as
of Capital Assets; and Schedule D (Form 1040). The trust owner of the trust a statement that:
doesn't net the capital gains and losses, nor does it issue • Shows all items of income, deduction, and credit of the
John Doe a Schedule K-1 (Form 1041) showing a $10 trust;
long-term capital loss. • Identifies the payer of each item of income;
QSSTs. Income allocated to S corporation stock held by the • Explains how the grantor or other person treated as owner
trust is treated as owned by the income beneficiary of the of the trust takes those items into account when figuring the
portion of the trust that owns the stock. Report this income grantor's or other person's taxable income or tax; and
following the rules discussed above for grantor type trusts. A • Informs the grantor or other person treated as the owner of
QSST can't elect any of the optional filing methods discussed the trust that those items must be included when figuring
below. taxable income and credits on their income tax return.
However, the trust, and not the income beneficiary, is Grantor trusts that haven't applied for an EIN and are
treated as the owner of the S corporation stock for figuring TIP going to file under Optional Method 1 don't need an
and attributing the tax results of a disposition of the stock. For EIN for the trust as long as they continue to report
example, if the disposition is a sale, the QSST election ends under that method.
as to the stock sold, and any gain or loss recognized on the
sale will be that of the trust. For more information on QSSTs, Optional Method 2. For a trust treated as owned by one
see Regulations section 1.1361-1(j). grantor or by one other person, the trustee must give all
payers of income during the tax year the name, address, and
Optional Filing Methods for Certain Grantor Type TIN of the trust. The trustee must also file with the IRS the
appropriate Forms 1099 to report the income or gross
Trusts proceeds paid to the trust during the tax year that show the
Generally, if a trust is treated as owned by one grantor or trust as the payer and the grantor, or other person treated as
other person, the trustee may choose Optional Method 1 or owner, as the payee. The trustee must report each type of
Optional Method 2 as the trust's method of reporting instead income in the aggregate and each item of gross proceeds
of filing Form 1041. Spouses will be treated as one grantor separately. The due date for any Forms 1099 required to be
for purposes of these two optional methods if: filed with the IRS by a trustee under this method is February
• All of the trust is treated as owned by the spouses, and 28, 2023 (March 31, 2023, if filed electronically).

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In addition, unless the grantor, or other person treated as For more information, see section 3406 and its
owner of the trust, is the trustee or a co-trustee of the trust, regulations.
the trustee must give the grantor or other person treated as
owner of the trust a statement that: Pooled Income Funds
• Shows all items of income, deduction, and credit of the If you are filing for a pooled income fund, attach a statement
trust; to support the following.
• Explains how the grantor or other person treated as owner • The calculation of the yearly rate of return.
of the trust takes those items into account when figuring the • The computation of the deduction for distributions to the
grantor's or other person's taxable income or tax; and beneficiaries.
• Informs the grantor or other person treated as the owner of • The computation of any charitable deduction.
the trust that those items must be included when figuring See section 642 and the regulations thereunder for more
taxable income and credits on their income tax return. This information.
statement satisfies the requirement to give the recipient
You don't have to complete Schedules A or B of Form
copies of the Forms 1099 filed by the trustee.
1041.
Optional Method 3. For a trust treated as owned by two or Also, you must file Form 5227 for the pooled income fund.
more grantors or other persons, the trustee must give all However, if all amounts were transferred in trust before May
payers of income during the tax year the name, address, and 27, 1969, or if an amount was transferred to the trust after
TIN of the trust. The trustee must also file with the IRS the May 26, 1969, for which no deduction was allowed under any
appropriate Forms 1099 to report the income or gross of the sections listed under section 4947(a)(2), then Form
proceeds paid to the trust by all payers during the tax year 5227 does not have to be filed.
attributable to the part of the trust treated as owned by each
grantor, or other person, showing the trust as the payer and Note. Form 1041-A is no longer filed by pooled income
each grantor, or other person treated as owner of the trust, as funds.
the payee. The trustee must report each type of income in
the aggregate and each item of gross proceeds separately. Electing Small Business Trusts (ESBTs)
The due date for any Forms 1099 required to be filed with the Special rules apply when figuring the tax on the S portion of
IRS by a trustee under this method is February 28, 2023 an ESBT. The S portion of an ESBT is the portion of the trust
(March 31, 2023, if filed electronically). that consists of stock in one or more S corporations and isn't
In addition, the trustee must give each grantor or other treated as a grantor type trust. The tax on the S portion:
person treated as owner of the trust a statement that: • Must be figured separately from the tax on the remainder
• Shows all items of income, deduction, and credit of the of the ESBT (if any) and attached to the return; and
trust attributable to the part of the trust treated as owned by • Is entered on Schedule G, Part I, line 4.
the grantor or other person;
The tax on the remainder (non-S portion) of the ESBT is
• Explains how the grantor or other person treated as owner
figured in the normal manner on Form 1041.
of the trust takes those items into account when figuring the
grantor's or other person's taxable income or tax; and Tax computation attachment. Attach to the return the tax
• Informs the grantor or other person treated as the owner of computation for the S portion of the ESBT.
the trust that those items must be included when figuring If you need to complete and attach a tax form or
taxable income and credits on their income tax return. This worksheet for the S portion of the trust, enter “ESBT” in the
statement satisfies the requirement to give the recipient top margin of the tax form, worksheet, or attachment.
copies of the Forms 1099 filed by the trustee.
To compute the tax on the S portion:
Changing filing methods. A trustee who previously had • Treat that portion of the ESBT as if it were a separate trust;
filed Form 1041 can change to one of the optional methods • Include only the income, losses, deductions, and credits
by filing a final Form 1041 for the tax year that immediately allocated to the ESBT as an S corporation shareholder and
precedes the first tax year for which the trustee elects to gain or loss from the disposition of S corporation stock;
report under one of the optional methods. On the front of the • Aggregate items of income, losses, deductions, and
final Form 1041, the trustee must enter “Pursuant to section credits allocated to the ESBT as an S corporation
1.671-4(g), this is the final Form 1041 for this grantor trust,” shareholder if the S portion of the ESBT has stock in more
and check the Final return box in item F. than one S corporation;
For more details on changing reporting methods, including • Deduct state and local income taxes directly related to the
changes from one optional method to another, see S portion or allocated to the S portion if the allocation is
Regulations section 1.671-4(g). reasonable in light of all the circumstances and
administrative expenses that wouldn't have been incurred if
Backup withholding. The following grantor trusts are the S corporation shares were not held by the trust;
treated as payors for purposes of backup withholding. • Deduct interest expense paid or accrued on indebtedness
1. A trust established after 1995, all of which is owned by incurred to acquire stock in an S corporation; and
two or more grantors (treating spouses filing a joint return as • Deduct charitable contributions attributable to the S
one grantor). portion. See Pub. 526 to figure the amount of the deduction if
2. A trust with 10 or more grantors established after 1983 either of the following apply.
but before 1996. 1. Cash contributions or contributions of ordinary income
property are more than 30% of the AGI of the S portion.
The trustee must withhold a certain percentage of
reportable payments made to any grantor who is subject to 2. Gifts of capital gain property are more than 20% of the
backup withholding. AGI of the S portion.
• Don't claim a deduction for capital losses in excess of
capital gains;

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• Don't claim an income distribution deduction or an Accounting Period
exemption amount;
• Don't claim an exemption amount in figuring the alternative A bankruptcy estate is allowed to have a fiscal year.
minimum tax (AMT); and However, this period can't be longer than 12 months.
• Don't use the tax rate schedule to figure the tax. The tax is
37% of the S portion's taxable income except in figuring the When To File
maximum tax on qualified dividends and capital gains.
For additional information, see Regulations section File Form 1041 on or before the 15th day of the 4th month
1.641(c)-1. following the close of the tax year. Use Form 7004 to apply
Other information. When figuring the tax and DNI on the for an automatic 6-month extension of time to file.
remaining (non-S) portion of the trust, disregard the S
corporation items. Disclosure of Return Information
Don't apportion to the beneficiaries any of the S
corporation items. Under section 6103(e)(5), tax returns of individual debtors
who have filed for bankruptcy under chapter 7 or 11 of title 11
If the ESBT consists entirely of stock in one or more S are, upon written request, open to inspection by or disclosure
corporations, don't make any entries on lines 1–23 to the trustee.
of page 1. Instead:
• Complete the entity portion; The returns subject to disclosure to the trustee are those
• Follow the instructions above for figuring the tax on the S for the year the bankruptcy begins and prior years. Use Form
corporation items; 4506, Request for Copy of Tax Return, to request copies of
• Enter the ESBT tax on Schedule G, Part I, line 4; the individual debtor's tax returns.
• Carry the Total tax from line 9 of Schedule G, Part I, to
line 24 on page 1; and If the bankruptcy case wasn't voluntary, disclosure can't
• Complete the rest of the return. be made before the bankruptcy court has entered an order
The grantor portion (if any) of an ESBT will follow the rules for relief, unless the court rules that the disclosure is needed
discussed under Grantor Type Trusts, earlier. for determining whether relief should be ordered.

Bankruptcy Estates Transfer of Tax Attributes From the Individual
The bankruptcy estate that is created when an individual Debtor to the Bankruptcy Estate
debtor files a petition under either chapter 7 or 11 of title 11 of
the U.S. Code is treated as a separate taxable entity. The The bankruptcy estate succeeds to the following tax
bankruptcy estate is administered by a trustee or a attributes of the individual debtor.
debtor-in-possession. If the case is later dismissed by the 1. NOL carryovers.
bankruptcy court, the individual debtor is treated as if the
bankruptcy petition had never been filed. 2. Charitable contribution carryovers.
3. Recovery of tax benefit items.
A separate taxable entity isn't created if a partnership or
corporation files a petition under any chapter of title 11 of the 4. Credit carryovers.
U.S. Code. 5. Capital loss carryovers.
For additional information about bankruptcy estates, see 6. Basis, holding period, and character of assets.
Pub. 908, Bankruptcy Tax Guide. 7. Method of accounting.
8. Unused passive activity losses.
Who Must File
9. Unused passive activity credits.
Every trustee (or debtor-in-possession) for an individual's
bankruptcy estate under chapter 7 or 11 of title 11 of the U.S. 10. Unused section 465 losses.
Code must file a return if the bankruptcy estate has gross
income of $12,950 or more for tax years beginning in 2022. Income, Deductions, and Credits

Failure to do so may result in an estimated Request for Under section 1398(c), the taxable income of the bankruptcy
Administrative Expenses being filed by the IRS in the estate is generally figured in the same manner as that of an
bankruptcy proceeding or a motion to compel filing of the individual. The gross income of the bankruptcy estate
return. includes any income included in property of the estate as
The filing of a tax return for the bankruptcy estate defined in U.S. Code, title 11, sections 541, 1115, and 1186.

CAUTION individual tax obligations.
! doesn't relieve the individual debtor(s) of their In certain chapter 11 cases, under section 1115 of title 11,
property of the bankruptcy estate includes (a) earnings from
services performed by the debtor after the beginning of the
EIN case (both wages and self-employment income) and before
Every bankruptcy estate of an individual required to file a the case is closed, dismissed, or converted to a case under a
return must have its own EIN. The SSN of the individual different chapter; and (b) property described in section 541 of
debtor can't be used as the EIN for the bankruptcy estate. title 11 and income earned therefrom that the debtor acquires
after the beginning of the case and before the case is closed,
dismissed, or converted. If section 1115 of title 11 applies,
the bankruptcy estate's gross income includes, as described
above, (a) the debtor's earnings from services performed

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after the beginning of the case, and (b) the income from Excess credits, such as the foreign tax credit, may also be
property acquired after the beginning of the case. carried back to pre-bankruptcy years of the individual debtor.
Standard deduction. A bankruptcy estate that doesn't
The income from property owned by the debtor when the itemize deductions is allowed a standard deduction of
case began is also included in the bankruptcy estate's gross $12,950 for tax year 2022.
income. However, if this property is exempted from the
bankruptcy estate or is abandoned by the trustee or Discharge of indebtedness. In a title 11 case, gross
debtor-in-possession, the income from the property isn't income doesn't include amounts that would normally be
included in the bankruptcy estate's gross income. Also included in gross income resulting from the discharge of
included in income is gain from the sale of the bankruptcy indebtedness. However, any amounts excluded from gross
estate's property. To figure gain, the trustee or income must be applied to reduce certain tax attributes in a
debtor-in-possession must determine the correct basis of the certain order. Attach Form 982 to show the reduction of tax
property. attributes.

To determine whether any amount paid or incurred by the Tax Rate Schedule
bankruptcy estate is allowable as a deduction or credit, or is
treated as wages for employment tax purposes, treat the Figure the tax for the bankruptcy estate using the tax rate
amount as if it were paid or incurred by the individual debtor schedule below. Enter the tax on Form 1040 or 1040-SR,
in the same trade or business or other activity the debtor line 16.
engaged in before the bankruptcy proceedings began.
If taxable income is:
Administrative expenses. The bankruptcy estate is Of the
allowed a deduction for any administrative expense allowed Over— But not over The tax is: amount over
—
under section 503 of title 11 of the U.S. Code, and any fee or —
charge assessed under chapter 123 of title 28 of the U.S. $0 $10,275 10% $0
10,275 41,775 $1,027.50 + 12% 10,275
Code, to the extent not disallowed under an Internal Revenue 41,775 89,075 4,807.50 + 22% 41,775
Code provision (for example, section 263, 265, or 275). 89,075 170,050 15,213.50 + 24% 89,075
Bankruptcy administrative expenses and fees, including 170,050 215,950 34,647.50 + 32% 170,050
accounting fees, attorney fees, and court costs, are 215,950 323,925 49,335.50 + 35% 215,950
323,925 ...... 87,126.75 + 37% 323,925
deductible on Schedule 1 (Form 1040), Part II, line 24z, as
allowable in arriving at AGI because they would not have
been incurred if property had not been held by the
bankruptcy estate. See section 67(e) and Final Regulations - Prompt Determination of Tax Liability
TD9918.
Administrative expenses of the bankruptcy estate To request a prompt determination of the tax liability of the
attributable to conducting a trade or business or for the bankruptcy estate, the trustee or debtor-in-possession must
production of estate rents or royalties are deductible in file a written request for the determination with the IRS. The
arriving at AGI on Form 1040, Schedules C, E, and F. request must be submitted in duplicate and executed under
Administrative expense loss. When figuring an NOL, penalties of perjury. The request must include a statement
nonbusiness deductions (including administrative expenses) indicating that it is a request for prompt determination of tax
are limited under section 172(d)(4) to the bankruptcy estate's liability and (a) the return type, and all the tax periods for
nonbusiness income. The excess nonbusiness deductions which prompt determination is sought; (b) the name and
are an administrative expense loss that may be carried back location of the office where the return was filed; (c) the
to each of the 3 preceding tax years and forward to each of debtor's name; (d) the debtor's SSN, TIN, or EIN; (e) the type
the 7 succeeding tax years of the bankruptcy estate. The of bankruptcy estate; (f) the bankruptcy case number; and (g)
amount of an administrative expense loss that may be the court where the bankruptcy is pending. Send the request
carried to any tax year is determined after the NOL to the Centralized Insolvency Operation, P.O. Box 7346,
deductions allowed for that year. An administrative expense Philadelphia, PA 19101-7346 (marked “Request for Prompt
loss is allowed only to the bankruptcy estate and can't be Determination”).
carried to any tax year of the individual debtor. The IRS will notify the trustee or debtor-in-possession
Carryback of NOLs and credits. within 60 days from receipt of the request if the return filed by
the trustee or debtor-in-possession has been selected for
Generally, an NOL arising in a tax year beginning in examination or has been accepted as filed. If the return is
! 2021 or later may not be carried back and instead selected for examination, it will be examined as soon as
CAUTION must be carried forward indefinitely. However,
possible. The IRS will notify the trustee or
farming losses arising in tax years beginning in 2021 or later debtor-in-possession of any tax due within 180 days from
may be carried back 2 years and carried forward indefinitely. receipt of the request or within any additional time permitted
See Pub. 536 and Pub. 225, Farmer’s Tax Guide, for more by the bankruptcy court.
information.
If the bankruptcy estate itself incurs an NOL (apart from See Rev. Proc. 2006-24, 2006-22 I.R.B. 943, available at
losses carried forward to the estate from the individual IRS.gov/irb/2006-22_IRB/ar12.html, modified by
debtor), it can carry back its NOLs not only to previous tax Announcement 2011-77, available at IRS.gov/irb/
years of the bankruptcy estate, but also to tax years of the 2011-51_IRB/ar13.
individual debtor prior to the year in which the bankruptcy
proceedings began.

Instructions for Form 1041 (2022) -17-

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Special Filing Instructions for Bankruptcy Estates Address
Use Form 1041 only as a transmittal for Form 1040 or Include the suite, room, or other unit number after the street
1040-SR. In the top margin of Form 1040 or 1040-SR, enter address. If the post office doesn't deliver mail to the street
“Attachment to Form 1041. DO NOT DETACH.” Attach Form address and the fiduciary has a P.O. box, show the box
1040 or 1040-SR to Form 1041. Complete only the number instead.
identification area at the top of Form 1041. Enter the name of If you want a third party (such as an accountant or an
the individual debtor in the following format: “John Q. Public attorney) to receive mail for the estate or trust, enter on the
Bankruptcy Estate.” Beneath, enter the name of the trustee in street address line “C/O” followed by the third party's name
the following format: “Avery Snow, Trustee.” In item D, enter and street address or P.O. box.
the date the petition was filed or the date of conversion to a
chapter 7 or 11 case. If the estate or trust has had a change of address
(including a change to an “in care of” name and address) and
Enter on Form 1041, line 24, the total tax from line 24 of did not file Form 8822-B, Change of Address or Responsible
Form 1040 or 1040-SR. Complete lines 25 through 30 of Party — Business, check the Change in fiduciary's address
Form 1041, and sign and date it. box in item F.
In a chapter 11 case, the bankruptcy estate's gross If the estate or trust has a change of mailing address
income may be affected by sections 1115 or 1186 of title 11 (including a new "in care of" name and address) or
of the U.S. Code. See Income, Deductions, and Credits, responsible party after filing its return, file Form 8822-B to
earlier. The debtor may receive a Form W-2, 1099-INT, notify the IRS of the change.
1099-DIV, 1099-MISC, or 1099-NEC or other information
return reporting wages or other income to the debtor for the A. Type of Entity
entire year, even though some or all of this income is Check the appropriate box(es) that describes the entity for
includible in the bankruptcy estate's gross income under which you are filing the return.
section 1115 of title 11 of the U.S. Code. If this happens, the
income reported to the debtor on the Form W-2 or 1099, or In some cases, more than one box is checked. Check all
other information return (and the withheld income tax shown boxes that apply to your trust. For example, if only a portion
on these forms) must be reasonably allocated between the of a trust is a grantor type trust or if only a portion of an ESBT
debtor and the bankruptcy estate. The debtor-in-possession is the S portion, then more than one box is checked.
(or the chapter 11 trustee, if one was appointed) must attach Note. Determination of entity status is made on an annual
a schedule that shows (a) all the income reported on the basis.
Form W-2, Form 1099, or other information return; (b) the
portion of this income includible in the bankruptcy estate's There are special reporting requirements for grantor
gross income; and (c) all the withheld income tax, if any, and ! type trusts, pooled income funds, ESBTs, and
the portion of withheld tax reasonably allocated to the CAUTION bankruptcy estates. See Special Reporting
bankruptcy estate. Also, the debtor-in-possesion (or the Instructions, earlier.
chapter 11 trustee, if one was appointed) must attach a copy
of the Form W-2, if any, issued to the debtor for the tax year if Decedent's Estate
the Form W-2 reports wages to the debtor and some or all of
An estate of a deceased person is a taxable entity separate
the wages are includible in the bankruptcy estate's gross
from the decedent. It generally continues to exist until the
income because of section 1115 of title 11 of the U.S. Code.
final distribution of the assets of the estate is made to the
For more details, including acceptable allocation methods,
heirs and other beneficiaries. The income earned from the
see Notice 2006-83, 2006-40 I.R.B. 596, available at
property of the estate during the period of administration or
IRS.gov/irb/2006-40_IRB/ar12.html.
settlement must be accounted for and reported by the estate.

Specific Instructions Simple Trust
A trust may qualify as a simple trust if:
Name of Estate or Trust 1. The trust instrument requires that all income must be
Copy the exact name of the estate or trust from the Form distributed currently;
SS-4, Application for Employer Identification Number, that 2. The trust instrument doesn't provide that any amounts
you used to apply for the EIN. If the name of the trust was are to be paid, permanently set aside, or used for charitable
changed during the tax year for which you are filing, enter the purposes; and
trust's new name and check the Change in trust's name box
in item F. 3. The trust doesn't distribute amounts allocated to the
corpus of the trust.
If a grantor type trust (discussed later), enter the name,
identification number, and address of the grantor(s) or other Complex Trust
owner(s) in parentheses after the name of the trust. A complex trust is any trust that doesn't qualify as a simple
trust as explained above.
Name and Title of Fiduciary
Enter the name and title of the fiduciary. If the name entered Qualified Disability Trust
is different from the name on the prior year's return, see A qualified disability trust is any non-grantor trust:
Change in Fiduciary's Name and Change in Fiduciary, later.
1. Described in 42 U.S.C. 1396p(c)(2)(B)(iv) and
established solely for the benefit of an individual under 65
years of age who is disabled, and

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2. All the beneficiaries of which are determined by the               life interest is figured using the yearly rate of return earned by 
Commissioner of Social Security to have been disabled for             the trust. See section 642(c) and the related regulations for 
some part of the tax year within the meaning of 42 U.S.C.             more information.
1382c(a)(3).
                                                                      B. Number of Schedules K-1 Attached
A trust will not fail to meet item 2 above just because the 
                                                                      Every trust or decedent's estate claiming an income 
trust's corpus may revert to a person who isn't disabled after 
                                                                      distribution deduction on page 1, line 18, must enter the 
the trust ceases to have any disabled beneficiaries.
                                                                      number of Schedules K-1 (Form 1041) that are attached to 
ESBT (S Portion Only)                                                 Form 1041.

The S portion of an ESBT is the portion of the trust that             C. Employer Identification Number
consists of S corporation stock and that isn't treated as             Every estate or trust that is required to file Form 1041 must 
owned by the grantor or another person. See Electing Small            have an EIN. An EIN may be applied for in the following 
Business Trusts (ESBTs), earlier, for more information about          ways.
an ESBT.                                                                Online at IRS.gov/EIN. The EIN is issued immediately 
                                                                      •
                                                                      once the application information is validated.
Grantor Type Trust
                                                                      • By mailing or faxing Form SS-4.
A grantor type trust is a legal trust under applicable state law 
that isn't recognized as a separate taxable entity for income           If the estate or trust hasn't received its EIN by the time the 
tax purposes because the grantor or other substantial owners          return is due, enter “Applied for” and the date you applied in 
have not relinquished complete dominion and control over              the space for the EIN. For more details, see Pub. 583, 
the trust.                                                            Starting a Business and Keeping Records.

Generally, for transfers made in trust after March 1, 1986,           D. Date Entity Created
the grantor is treated as the owner of any portion of a trust in      Enter the date the trust was created, or, if a decedent's 
which they have a reversionary interest in either the income          estate, the date of the decedent's death.
or corpus therefrom, if, as of the inception of that portion of 
the trust, the value of the reversionary interest is more than        E. Nonexempt Charitable and 
5% of the value of that portion. Also, the grantor is treated as 
holding any power or interest that was held by either the             Split-Interest Trusts
grantor's spouse at the time that the power or interest was 
created or who became the grantor's spouse after the                  Section 4947(a)(1) Trust
creation of that power or interest. See Grantor Type Trusts,          Check this box if the trust is a nonexempt charitable trust 
earlier, for more information.                                        within the meaning of section 4947(a)(1).
Pre-need funeral trusts. The purchasers of pre-need                     A nonexempt charitable trust is a trust:
funeral services are the grantors and the owners of pre-need          • That isn't exempt from tax under section 501(a);
funeral trusts established under state laws. See Rev. Rul.            • In which all of the unexpired interests are devoted to one 
87-127, 1987-2 C.B. 156. However, the trustees of pre-need            or more charitable purposes described in section 170(c)(2)
funeral trusts can elect to file the return and pay the tax for       (B); and
qualified funeral trusts. For more information, see Form              • For which a deduction was allowed under section 170 (for 
1041-QFT.                                                             individual taxpayers) or similar Code section for personal 
Nonqualified deferred compensation plans.      Taxpayers              holding companies, foreign personal holding companies, or 
may adopt and maintain grantor trusts in connection with              estates or trusts (including a deduction for estate or gift tax 
nonqualified deferred compensation plans (sometimes                   purposes).
referred to as “rabbi trusts”). Rev. Proc. 92-64, 1992-2 C.B.         Nonexempt charitable trust treated as a private founda-
422, provides a “model grantor trust” for use in rabbi trust          tion. If a nonexempt charitable trust is treated as though it 
arrangements. The procedure also provides guidance for                were a private foundation under section 509, then the 
requesting rulings on the plans that use these trusts.                fiduciary must file Form 990-PF, Return of Private 
QSSTs. The beneficiary of a QSST is treated as the                    Foundation, in addition to Form 1041.
substantial owner of that portion of the trust which consists of        If a nonexempt charitable trust is treated as though it were 
stock in an S corporation for which an election under section         a private foundation, and it has no taxable income under 
1361(d)(2) has been made. See QSSTs, earlier.                         subtitle A, it may check the box on Form 990-PF, Part VI-A, 
                                                                      line 15, and enter the tax-exempt interest received or 
Bankruptcy Estate                                                     accrued during the year on that line, instead of filing Form 
A chapter 7 or 11 bankruptcy estate is a separate and distinct        1041 to meet its section 6012 filing requirement for that tax 
taxable entity from the individual debtor for federal income          year.
tax purposes. See Bankruptcy Estates, earlier.                          Excise taxes.  If a nonexempt charitable trust is treated as 
                                                                      a private foundation, then it is subject to the same excise 
For more information, see section 1398 and Pub. 908.                  taxes under chapters 41 and 42 that a private foundation is 
                                                                      subject to. If the nonexempt charitable trust is liable for any of 
Pooled Income Fund                                                    these taxes (except the section 4940 tax), then it reports 
A pooled income fund is a split-interest trust with a remainder       these taxes on Form 4720. Taxes paid by the trust on Form 
interest for a public charity and a life income interest retained     4720 or on Form 990-PF (the section 4940 tax) can't be 
by the donor or for another person. The property is held in a         taken as a deduction on Form 1041.
pool with other pooled income fund property and doesn't 
include any tax-exempt securities. The income for a retained 

Instructions for Form 1041 (2022)                                 -19-

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Not a Private Foundation                                           Amended Schedule H (Form 1040).         If you discover an 
Check this box if the nonexempt charitable trust (section          error on a Schedule H (Form 1040), Household Employment 
4947(a)(1)) isn't treated as a private foundation under section    Taxes, that you previously filed with Form 1041, file an 
509. For more information, see Regulations section                 “Amended” Form 1041 and attach a corrected Schedule H.
53.4947-1.                                                              In the top margin of your corrected Schedule H, enter 
Other returns that must be filed. If a nonexempt                   “CORRECTED” and the date you discovered the error. Also, 
charitable trust isn't treated as though it were a private         on an attachment, explain the reason for your correction. If 
foundation, the fiduciary must file Form 990, Return of            you owe tax, pay the tax in full with your amended Form 
Organization Exempt From Income Tax, or Form 990-EZ,               1041. If you overpaid tax on a previously filed Schedule H, 
Short Form Return of Organization Exempt From Income               depending on whether you choose the adjustment or claim 
Tax, in addition to Form 1041, if the trust meets the filing       for refund process to correct the error, you must either repay 
requirements for either of those forms.                            or reimburse the employee's share of social security and 
                                                                   Medicare tax or get the employee's consent to the filing of a 
  If a nonexempt charitable trust isn't treated as though it       refund claim for their share. See Pub. 926 for more 
were a private foundation, and it has no taxable income            information.
under subtitle A, it may answer “Yes” on Form 990, Part V, 
line 12a, and enter the tax-exempt interest received or            Amended Schedule K-1 (Form 1041).       If the amended 
accrued during the year on Form 990, Part V, line 12b,             return results in a change to income, or a change in 
instead of filing Form 1041 to meet its section 6012 filing        distribution of any income or other information provided to a 
requirement for that tax year (or if Form 990-EZ is filed          beneficiary, an amended Schedule K-1 (Form 1041) must 
instead of Form 990, you may check the box on Form                 also be filed with the amended Form 1041 and given to each 
990-EZ, line 43, and enter the tax-exempt interest received        beneficiary. Check the “Amended K-1” box at the top of the 
or accrued during the year on that line).                          amended Schedule K-1.

Section 4947(a)(2) Trust                                           Final Return
Check this box if the trust is a split-interest trust described in Check this box if this is a final return because the estate or 
section 4947(a)(2).                                                trust has terminated. Also, check the “Final K-1” box at the 
  A split-interest trust is a trust that:                          top of Schedule K-1.
• Isn't exempt from tax under section 501(a);                           If, on the final return, there are excess deductions, an 
• Has some unexpired interests that are devoted to                 unused capital loss carryover, or an NOL carryover, see the 
purposes other than religious, charitable, or similar purposes     instructions for Schedule K-1, box 11, later.
described in section 170(c)(2)(B); and
• Has amounts transferred in trust after May 26, 1969, for         Change in Trust's Name
which a deduction was allowed under section 170 (for 
                                                                   If the name of the trust has changed from the name shown on 
individual taxpayers) or similar Code sections for personal 
                                                                   the prior year's return (or Form SS-4 if this is the first return 
holding companies, foreign personal holding companies, or 
                                                                   being filed), be sure to check this box.
estates or trusts (including a deduction for estate or gift tax 
purposes).                                                         Change in Fiduciary
Other returns that must be filed. The fiduciary of a               If a different fiduciary enters their name on the line for Name 
split-interest trust must file Form 5227. However, see the         and title of fiduciary than was shown on the prior year's return 
Instructions for Form 5227 for the exception that applies to       (or Form SS-4 if this is the first return being filed) and you 
split-interest trusts other than section 664 charitable            didn't file a Form 8822-B, be sure to check this box. If there is 
remainder trusts.                                                  a change in the fiduciary whose address is used as the 
                                                                   mailing address for the estate or trust after the return is filed, 
F. Initial Return, Amended Return,                                 use Form 8822-B to notify the IRS.
etc.
                                                                   Change in Fiduciary's Name
Amended Return                                                     If the fiduciary changed their name from the name they 
If you are filing an amended Form 1041:                            entered on the prior year's return (or Form SS-4 if this is the 
• Check the “Amended return” box in item F,                        first return being filed), be sure to check this box.
• Complete the entire return,
• Correct the appropriate lines with the new information, and      Change in Fiduciary's Address
• Refigure the estate's or trust's tax liability.                  If the same fiduciary who filed the prior year's return (or Form 
                                                                   SS-4 if this is the first return being filed) files the current 
  Note. If you are amending the return for an NOL 
                                                                   year's return and changed the address on the return 
carryback, also check the “Net operating loss carryback” box 
                                                                   (including a change to an "in care of" name and address), 
in item F.
                                                                   and didn't report the change on Form 8822-B, check this box.
  If the total tax on line 24 is larger on the amended return 
than on the original return, you should generally pay the               If the address shown on Form 1041 changes after you file 
difference with the amended return. However, you should            the form (including a change to an "in care of" name and 
adjust this amount if there is any increase or decrease in the     address), file Form 8822-B to notify the IRS of the change.
total payments shown on line 26.
                                                                   G. Section 645 Election
  Attach a sheet that explains the reason for the 
amendments and identifies the lines and amounts being              If a section 645 election was made by filing Form 8855, 
changed on the amended return.                                     check the box in item G. See Special Rule for Certain 

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Revocable Trusts under Who Must File, earlier, and Form the decedent's estate. Also, show the part of the interest
8855 for more information about this election. reported on Form 1041 and subtract it from the subtotal.

Income Line 2a—Total Ordinary Dividends
Report the estate's or trust's share of all ordinary dividends
Determining Qualified Business Income (QBI) received during the tax year.
The estate's or trust's QBI includes items of income, gain,
deduction, and loss that are effectively connected with the For the year of the decedent's death, Forms 1099-DIV
conduct of a trade or business within the United States and issued in the decedent's name may include dividends earned
included or allowed in determining taxable income for the after the date of death that should be reported on the income
year. This includes the estate's or trust's share of items of tax return of the decedent's estate. When preparing the
income, gain, deduction, and loss from trades or business decedent's final income tax return, report on Schedule B
conducted by partnerships (other than publicly traded (Form 1040), line 5, the ordinary dividends shown on Form
partnerships (PTPs)), S corporations, and other estates or 1099-DIV. Under the last entry on line 5, subtotal all the
trusts. For more information see section 199A, the dividends reported on line 5. Below the subtotal, enter “Form
Instructions for Form 8995, and the Instructions for Form 1041” and the name and address shown on Form 1041 for
8995-A. the decedent's estate. Also, show the part of the ordinary
dividends reported on Form 1041 and subtract it from the
Special Rule for Blind Trust subtotal.
If you are reporting income from a qualified blind trust (under Report capital gain distributions on Schedule D
the Ethics in Government Act of 1978), don't identify the TIP (Form 1041), line 13.
payer of any income to the trust but complete the rest of the
return as provided in the instructions. Also enter “Blind Trust”
at the top of page 1. Line 2b—Qualified Dividends
Enter the beneficiary's allocable share of qualified dividends
Extraterritorial Income Exclusion on line 2b(1) and enter the estate's or trust's allocable share
The extraterritorial income exclusion isn't allowed for on line 2b(2).
transactions after 2006. However, income from certain
long-term sales and leases may still qualify for the exclusion. If the estate or trust received qualified dividends that were
For details and to figure the amount of the exclusion, see derived from IRD, you must reduce the amount on line 2b(2)
Form 8873, Extraterritorial Income Exclusion, and its by the portion of the estate tax deduction claimed on Form
separate instructions. The estate or trust must report the 1041, page 1, line 19, that is attributable to those qualified
extraterritorial income exclusion on line 15a of Form 1041, dividends. Don't reduce the amounts on line 2b by any other
page 1. allocable expenses.
Although the extraterritorial income exclusion is entered Note. The beneficiary's share (as figured above) may differ
on line 15a, it is an exclusion from income and should be from the amount entered on line 2b of Schedule K-1 (Form
treated as tax-exempt income when completing other parts of 1041).
the return.
Qualified dividends. Qualified dividends are eligible for a
Line 1—Interest Income lower tax rate than other ordinary income. Generally, these
dividends are reported to the estate or trust in box 1b of
Report the estate's or trust's share of all taxable interest Form(s) 1099-DIV. See Pub. 550 for the definition of qualified
income that was received during the tax year. Examples of dividends if the estate or trust received dividends not
taxable interest include interest from: reported on Form 1099-DIV.
• Accounts (including certificates of deposit and money
Exception. Some dividends may be reported to the estate
market accounts) with banks, credit unions, and thrift
or trust as in box 1b of Form 1099-DIV but aren't qualified
institutions;
dividends. These include the following.
• Notes, loans, and mortgages;
• U.S. Treasury bills, notes, and bonds; • Dividends received on any share of stock that the estate or
trust held for less than 61 days during the 121-day period that
• U.S. savings bonds;
began 60 days before the ex-dividend date. The ex-dividend
• Original issue discount; and
date is the first date following the declaration of a dividend on
• Income received as a regular interest holder of a real
which the purchaser of a stock isn't entitled to receive the
estate mortgage investment conduit (REMIC).
next dividend payment. When counting the number of days
For taxable bonds acquired after 1987, amortizable bond the stock was held, include the day the estate or trust
premium is treated as an offset to the interest income instead disposed of the stock but not the day it acquired the stock.
of as a separate interest deduction. See Pub. 550. However, you can't count certain days during which the
estate's or trust's risk of loss was diminished. See Pub. 550
For the year of the decedent's death, Forms 1099-INT for more details.
issued in the decedent's name may include interest income • Dividends attributable to periods totaling more than 366
earned after the date of death that should be reported on the days that the estate or trust received on any share of
income tax return of the decedent's estate. When preparing preferred stock held for less than 91 days during the 181-day
the decedent's final income tax return, report on Schedule B period that began 90 days before the ex-dividend date.
(Form 1040), line 1, the total interest shown on Form When counting the number of days the stock was held,
1099-INT. Under the last entry on line 1, subtotal all the include the day the estate or trust disposed of the stock but
interest reported on line 1. Below the subtotal, enter “Form not the day it acquired the stock. However, you can't count
1041” and the name and address shown on Form 1041 for certain days during which the estate's or trust's risk of loss

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was diminished. See Pub. 550 for more details. Preferred Line 7—Ordinary Gain or (Loss)
dividends attributable to periods totaling less than 367 days Enter from line 17, Form 4797, Sales of Business Property,
are subject to the 61-day holding period rule above. the ordinary gain or loss from the sale or exchange of
• Dividends on any share of stock to the extent that the property other than capital assets and also from involuntary
estate or trust is under an obligation (including a short sale) conversions (other than casualty or theft).
to make related payments with respect to positions in
substantially similar or related property. Line 8—Other Income
• Payments in lieu of dividends, but only if you know or have
reason to know that the payments are not qualified dividends. Enter other items of income not included on lines 1, 2a, and 3
through 7. List the type and amount on an attached schedule
If you have an entry on line 2b(2), be sure you use if the estate or trust has more than one item.
TIP Schedule D (Form 1041), the Schedule D Tax Items to be reported on line 8 include the following.
Worksheet, or the Qualified Dividends Tax • Unpaid compensation received by the decedent's estate
Worksheet, whichever applies, to figure the estate's or trust's that is IRD.
tax. Figuring the estate's or trust's tax liability in this manner • Any part of a total distribution shown on Form 1099-R,
will usually result in a lower tax. Distributions From Pensions, Annuities, Retirement or
Profit-Sharing Plans, IRAs, Insurance Contracts, etc., that is
Line 3—Business Income or (Loss) treated as ordinary income. For more information, see Form
If the estate operated a business, report the income and 4972, Tax on Lump-Sum Distributions, and its instructions.
expenses on Schedule C (Form 1040), Profit or Loss From • Taxable contributions received during the tax year by an
Business. Enter the net profit or (loss) from Schedule C on Alaska Native Settlement Trust from an Alaska Native
line 3. Corporation. Report gain from taxable contributions of
noncash property on Schedule D (Form 1041).
Line 4—Capital Gain or (Loss) • The amount of payroll tax credit taken by an employer on
Enter the gain from Schedule D (Form 1041), Part III, line 19, its 2022 employment tax returns (Forms 941, 943, and 944)
column (3), or the loss from Part IV, line 20. for qualified paid sick and qualified paid family leave under
the Families First Coronavirus Response Act (FFCRA) and
If you deferred a capital gain into a QOF, you must file the American Rescue Plan Act of 2021 (ARP) (both the
your return with Schedule D, Form 8949, and Form 8997 nonrefundable and refundable portions). These amounts
attached. You will need to file Form 8997 annually until you must be included in gross income for the tax year that
dispose of the investment. See the Form 8997 instructions. includes the last day of the calendar quarter with respect to
Don't substitute Schedule D (Form 1040) for which the credit is allowed. A credit is available only if the
leave was taken sometime after March 31, 2020, and before
! Schedule D (Form 1041). October 1, 2021, and only after the qualified leave wages
CAUTION
were paid, which might under certain circumstances not
Line 5—Rents, Royalties, Partnerships, Other occur until a quarter after September 30, 2021, including
quarters during 2022. Accordingly, all lines related to
Estates and Trusts, etc. qualified sick and family leave wages remain on the
Use Schedule E (Form 1040), Supplemental Income and employment tax returns for 2022.
Loss, to report the estate's or trust's share of income or
(losses) from rents, royalties, partnerships, S corporations, Note. Beginning in tax year 2021, there is no current year
other estates and trusts, and REMICs. Also use Schedule E section 965(a) income inclusion reported on line 8. However,
(Form 1040) to report farm rental income and expenses see the instructions for Schedule G, Part I, line 8, later, for
based on crops or livestock produced by a tenant. Enter the information about a triggering event for a section 965(i) net
net profit or (loss) from Schedule E on line 5. See the tax liability.
Instructions for Schedule E (Form 1040) for reporting
requirements. Deductions

If the estate or trust received a Schedule K-1 from a Depreciation, Depletion, and Amortization
partnership, S corporation, or other flow-through entity, use
the corresponding lines on Form 1041 to report the interest, A trust or decedent's estate is allowed a deduction for
dividends, capital gains, etc., from the flow-through entity. depreciation, depletion, and amortization only to the extent
the deductions aren't apportioned to the beneficiaries. An
Line 6—Farm Income or (Loss) estate or trust isn't allowed to make an election under section
179 to expense depreciable business assets.
If the estate or trust operated a farm, use Schedule F (Form
1040), Profit or Loss From Farming, to report farm income The estate's or trust's share of depreciation, depletion,
and expenses. Enter the net profit or (loss) from Schedule F and amortization is generally reported on the appropriate
on line 6. lines of Schedule C, E, or F (Form 1040), the net income or
loss from which is shown on line 3, 5, or 6 of Form 1041. If
If an estate or trust has farm rental income and the deduction isn't related to a specific business or activity,
! expenses based on crops or livestock produced by a then report it on line 15a.
CAUTION tenant, report the income and expenses on
Schedule E (Form 1040). Don't use Form 4835, Farm Rental Depreciation. For a decedent's estate, the depreciation
Income and Expenses, or Schedule F (Form 1040) to report deduction is apportioned between the estate and the heirs,
such income and expenses and don't include the net profit legatees, and devisees on the basis of the estate's income
or (loss) from such income and expenses on line 6. allocable to each.
For a trust, the depreciation deduction is apportioned
between the income beneficiaries and the trust on the basis

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of the trust income allocable to each, unless the governing limitations for the tax year the deduction is claimed. See Pub.
instrument (or local law) requires or permits the trustee to 559 for more information.
maintain a depreciation reserve. If the trustee is required to
maintain a reserve, the deduction is first allocated to the trust, Accrued Expenses
up to the amount of the reserve. Any excess is allocated Generally, an accrual basis taxpayer can deduct accrued
among the income beneficiaries and the trust in the same expenses in the tax year that (a) all events have occurred
manner as the trust's accounting income. See Regulations that determine the liability, and (b) the amount of the liability
section 1.167(h)-1(b). can be figured with reasonable accuracy. However, all the
Depletion. For mineral or timber property held by a events that establish liability are treated as occurring only
decedent's estate, the depletion deduction is apportioned when economic performance takes place. There are
between the estate and the heirs, legatees, and devisees on exceptions for recurring items. See section 461(h).
the basis of the estate's income from such property allocable
to each. Limitations on Deductions

For mineral or timber property held in trust, the depletion At-Risk Loss Limitations
deduction is apportioned between the income beneficiaries
Generally, the amount the estate or trust has “at-risk” limits
and the trust based on the trust income from such property
the loss it can deduct for any tax year. Use Form 6198,
allocable to each, unless the governing instrument (or local
At-Risk Limitations, to figure the deductible loss for the year
law) requires or permits the trustee to maintain a reserve for
and file it with Form 1041. For more information, see Pub.
depletion. If the trustee is required to maintain a reserve, the
925, Passive Activity and At-Risk Rules.
deduction is first allocated to the trust, up to the amount of
the reserve. Any excess is allocated among the beneficiaries Passive Activity Loss and Credit Limitations
and the trust in the same manner as the trust's accounting
income. See Regulations section 1.611-1(c)(4). In general. Section 469 and the regulations thereunder
generally limit losses from passive activities to the amount of
Amortization. The deduction for amortization is apportioned
income derived from all passive activities. Similarly, credits
between an estate or trust and its beneficiaries under the
from passive activities are generally limited to the tax
same principles used to apportion the deductions for
attributable to such activities. These limitations are first
depreciation and depletion.
applied at the estate or trust level.
The deduction for the amortization of reforestation
Generally, an activity is a passive activity if it involves the
expenditures under section 194 is allowed only to an estate.
conduct of any trade or business, and the taxpayer does not
Allocable share from a pass-through entity. materially participate in the activity. Passive activities don't
Depreciation, depletion, and amortization received from a include working interests in oil and gas properties. See
pass-through entity on a Schedule K-1 are apportioned and section 469(c)(3).
reported in the same manner as discussed above. A section
179 expense received from a pass-through entity on a Note. Material participation standards for estates and trusts
Schedule K-1 isn't deductible by the estate or trust. haven't been established by regulations.
For a grantor trust, material participation is determined at
Allocation of Deductions for Tax-Exempt the grantor level.
Income If the estate or trust distributes an interest in a passive
Generally, no deduction that would otherwise be allowable is activity, the basis of the property immediately before the
allowed for any expense (whether for business or for the distribution is increased by the passive activity losses
production of income) that is allocable to tax-exempt income. allocable to the interest, and such losses can't be deducted.
Examples of tax-exempt income include: See section 469(j)(12).
• Certain death benefits (section 101),
Losses from passive activities are first subject to the
• Interest on state or local bonds (section 103),
TIP at-risk rules. When the losses are deductible under
• Compensation for injuries or sickness (section 104), and
the at-risk rules, the passive activity rules then apply.
• Income from discharge of indebtedness in a title 11 case
(section 108). Rental activities. Generally, rental activities are passive
Exception. State income taxes and business expenses that activities, whether or not the taxpayer materially participates.
are allocable to tax-exempt interest are deductible. However, certain taxpayers who materially participate in real
Expenses that are directly allocable to tax-exempt income property trades or businesses aren't subject to the passive
are allocated only to tax-exempt income. A reasonable activity limitations on losses from rental real estate activities
proportion of expenses indirectly allocable to both in which they materially participate. For more details, see
tax-exempt income and other income must be allocated to section 469(c)(7).
each class of income. For tax years of an estate ending less than 2 years after
the decedent's date of death, up to $25,000 of deductions
Deductions That May Be Allowable for Estate and deduction equivalents of credits from rental real estate
Tax Purposes activities in which the decedent actively participated are
Administration expenses and casualty and theft losses allowed. Any excess losses or credits are suspended for the
deductible on Form 706 may be deducted, to the extent year and carried forward.
otherwise deductible for income tax purposes, on Form 1041 Portfolio income. Portfolio income isn't treated as income
if the fiduciary files a statement waiving the right to deduct from a passive activity, and passive losses and credits
the expenses and losses on Form 706. The statement must generally may not be applied to offset it. Portfolio income
be filed before the expiration of the statutory period of generally includes interest, dividends, royalties, and income

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from annuities. Portfolio income of an estate or trust must be 1. Any investment interest (subject to limitations—see
accounted for separately. below),
Forms to file. See Form 8582, Passive Activity Loss 2. Any qualified residence interest (see later), and
Limitations, to figure the amount of losses allowed from 3. Any interest payable under section 6601 on any
passive activities. See Form 8582-CR, Passive Activity unpaid portion of the estate tax attributable to the value of a
Credit Limitations, to figure the amount of credit allowed for reversionary or remainder interest in property for the period
the current year. during which an extension of time for payment of such tax is
in effect.
Business Interest
Business interest expense could be limited. For more Limitation on deduction of business interest. Business
information about limitations on deductions for business interest expense is limited to the sum of business interest
interest, see section 163(j) and Line 10—Interest, later. income, 30% of the adjusted taxable income and floor plan
financing interest. Business interest expense includes any
Transactions Between Related Taxpayers interest paid or accrued on indebtedness properly allocable
Under section 267, a trust that uses the accrual method of to a trade or business. A taxpayer, other than a tax shelter,
accounting may only deduct business expenses and interest that meets the gross receipts test is not required to limit
owed to a related party in the year the payment is included in business interest expense under section 163(j). A taxpayer
the income of the related party. For this purpose, a related meets the gross receipts test if the taxpayer has average
party includes: annual gross receipts of $27 million or less for the 3 prior tax
years. Gross receipts include the aggregate gross receipts
1. A grantor and a fiduciary of any trust; from all persons treated as a single employer such as a
2. A fiduciary of a trust and a fiduciary of another trust, if controlled group of corporations, commonly controlled
the same person is a grantor of both trusts; partnerships or proprietorships, and affiliated service groups.
3. A fiduciary of a trust and a beneficiary of such trust; If the taxpayer fails to meet the gross receipts test, Form
8990 is generally required.
4. A fiduciary of a trust and a beneficiary of another trust,
if the same person is a grantor of both trusts; Investment interest. Generally, investment interest is
5. A fiduciary of a trust and a corporation more than 50% interest (including amortizable bond premium on taxable
in value of the outstanding stock of which is owned, directly bonds acquired after October 22, 1986, but before January 1,
or indirectly, by or for the trust or by or for a person who is a 1988) that is paid or incurred on indebtedness that is properly
grantor of the trust; and allocable to property held for investment. Investment interest
doesn't include any qualified residence interest, or interest
6. An executor of an estate and a beneficiary of that that is taken into account under section 469 in figuring
estate, except for a sale or exchange to satisfy a pecuniary income or loss from a passive activity.
bequest (that is, a bequest of a sum of money).
Generally, net investment income (NII) is the excess of
Line 10—Interest investment income over investment expenses. Investment
Enter the amount of interest (subject to limitations) paid or expenses (other than interest) are deductible only to the
incurred by the estate or trust on amounts borrowed by the extent they are allowable under section 67(e).
estate or trust, or on debt acquired by the estate or trust (for The amount of the investment interest deduction may be
example, outstanding obligations from the decedent) that limited. Use Form 4952, Investment Interest Expense
isn't claimed elsewhere on the return. Deduction, to figure the allowable investment interest
deduction.
If the proceeds of a loan were used for more than one
If you must complete Form 4952, check the box on line 10
purpose (for example, to purchase a portfolio investment and
of Form 1041 and attach Form 4952. Then, add the
to acquire an interest in a passive activity), the fiduciary must
deductible investment interest to the other types of
make an interest allocation according to the rules in
deductible interest and enter the total on line 10.
Temporary Regulations section 1.163-8T.
Qualified residence interest. Interest paid or incurred by
Don't include interest paid on indebtedness incurred or an estate or trust on indebtedness secured by a qualified
continued to purchase or carry obligations on which the residence of a beneficiary of an estate or trust is treated as
interest is wholly exempt from income tax. qualified residence interest if the residence would be a
Personal interest isn't deductible. Examples of personal qualified residence (that is, the principal residence or the
interest include interest paid on: secondary residence selected by the beneficiary) if owned by
• Revolving charge accounts used to purchase the beneficiary. The beneficiary must have a present interest
personal-use property; in the estate or trust or an interest in the residuary of the
• Personal notes for money borrowed from a bank, a credit estate or trust. See Pub. 936, Home Mortgage Interest
union, or other person; Deduction, for an explanation of the general rules for
• Installment loans on personal-use property; and deducting home mortgage interest.
• Underpayments of federal, state, or local income taxes. See section 163(h)(3) for a definition of qualified
residence interest and for limitations on indebtedness.
Interest that is paid or incurred on indebtedness allocable
to a trade or business (including a rental activity) should be Line 11—Taxes
deducted on the appropriate line of Schedule C, E, or F
(Form 1040), the net income or loss from which is shown on The deduction for state and local taxes is limited to
line 3, 5, or 6 of Form 1041. ! $10,000. The limitation applies to the total of your
CAUTION state and local income taxes (or general sales taxes,
Types of interest to include on line 10 are:

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if elected instead of income taxes), real estate taxes, and 1. You made a cash contribution to an entity described in
personal property taxes. The limitation does not apply to section 170(c).
foreign income taxes, and state and local taxes paid or 2. In return for the cash contribution, you received a state
accrued in carrying on a trade or business or for the or local tax credit.
production of income.
3. You must reduce your charitable contribution
Enter any deductible taxes paid or incurred during the tax deduction by the amount of the state or local tax credit you
year that aren't deductible elsewhere on Form 1041. receive.
Deductible taxes include the following.
• State and local income taxes. You can deduct state and If you meet these conditions, and to the extent you apply the
local income taxes unless you elect to deduct state and local state or local tax credit to this or a prior year's state or local
general sales taxes. You can't deduct both. tax liability, you may include this amount on line 11. To the
• State and local general sales taxes. You can elect to extent you apply a portion of the credit to offset your state or
deduct state and local general sales taxes instead of state local tax liability in a subsequent year (as permitted by law),
and local income taxes. Generally, you can elect to deduct you may treat this amount as state or local tax paid in the
the actual state and local general sales taxes (including year the credit is applied. For more information about this
compensating use taxes) you paid in 2022 if the tax rate was safe harbor and examples, see Notice 2019-12.
the same as the general sales tax rate. However, sales taxes
on food, clothing, medical supplies, and motor vehicles are Line 12—Fiduciary Fees
deductible as a general sales tax even if the tax rate was less Enter the deductible fees paid or incurred to the fiduciary for
than the general sales tax rate. Sales taxes on motor vehicles administering the estate or trust during the tax year.
are also deductible as a general sales tax if the tax rate was Fiduciary expenses include probate court fees and costs,
more than the general sales tax rate, but the tax is deductible fiduciary bond premiums, legal publication costs of notices to
only up to the amount of tax that would have been imposed at creditors or heirs, the cost of certified copies of the
the general sales tax rate. Motor vehicles include cars, decedent's death certificate, and costs related to fiduciary
motorcycles, motor homes, recreational vehicles, sport utility accounts.
vehicles, trucks, vans, and off-road vehicles. Also include
any state and local general sales taxes paid for a leased Fiduciary fees deducted on Form 706 can't be
motor vehicle. TIP deducted on Form 1041.
Do not include sales taxes paid on items used in a trade or
business. An estate or trust cannot use the Optional Sales Note. Fiduciary fees are allowable under section 67(e) if
Tax Tables for individuals in the Instructions for Schedule A they are costs that are paid or incurred in connection with the
(Form 1040), Itemized Deductions, to figure its deduction. administration of an estate or a non-grantor trust that would
• State and local real property taxes. not have been incurred if the property were not held in such
estate or trust. See Final Regulations - TD9918 and
Note. The deduction for foreign real property taxes is no Regulations section 1.67-4 for more information.
longer allowed.
• State and local personal property taxes. Line 14—Attorney, Accountant, and Return
• Foreign or U.S. possession income taxes. You may want Preparer Fees
to take a credit for the tax instead of a deduction. See the
instructions for Schedule G, Part I, line 2a, later, for more Expenses for preparation of fiduciary income tax returns, the
details. decedent's final individual income tax returns, and all estate
• The generation-skipping transfer (GST) tax imposed on and GST tax returns are fully deductible. However, expenses
income distributions. for preparing all other tax returns, including gift tax returns,
are considered costs commonly and customarily incurred by
Don't deduct: individuals and are not deductible. For more information, see
• Federal income taxes; Final Regulations - TD9918 and Regulations section 1.67-4.
• Estate, inheritance, legacy, succession, and gift taxes;
• Federal duties and excise taxes; or Line 15a—Other Deductions
• Foreign real property taxes. Attach your own statement, listing by type and amount all
Do not deduct the estate's or trust's deduction for social allowable deductions that aren't deductible elsewhere on
security and Medicare taxes by the amount claimed on its Form 1041.
employment tax returns for the nonrefundable and Allowable deductions include all deductions listed in
refundable portions of the FFCRA and the ARP credits for section 67(b) (including estate taxes attributable to IRD
qualified sick and family leave wages. Instead, report this under section 691(c)), and other costs allowable under
amount as income on line 8. section 67(e) paid or incurred in connection with the
Safe harbor for certain charitable contributions made in administration of the estate or trust that would not have been
exchange for a state or local tax credit. If you made a incurred if the property were not held in the estate or trust.
charitable contribution in exchange for a state or local tax Don't include any losses on worthless bonds and similar
credit and your charitable contribution deduction must be obligations and nonbusiness bad debts. Report these losses,
reduced as a result of receiving or expecting to receive the as applicable, on Form 8949.
tax credit, you may qualify for a safe harbor that allows you to
treat some or all of the disallowed charitable contribution as a Don't deduct medical or funeral expenses on Form 1041.
payment of state and local taxes. The safe harbor applies if Medical expenses of the decedent paid by the estate may be
you meet the following conditions. deductible on the decedent's income tax return for the year
incurred. See section 213(c). Funeral expenses are
deductible only on Form 706.

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Other costs paid or incurred by estates and non-grantor that are incurred commonly or customarily by individuals and
trusts. Under section 67(e), deductions are allowable for costs (other than a de minimis amount) that are not incurred
costs which are paid or incurred by an estate or non-grantor commonly or customarily by individuals, then (except to the
trust in connection with the administration of the estate or extent provided otherwise by guidance published in the
trust and would not have been incurred if the property were Internal Revenue Bulletin) the single fee, commission, or
not held in such estate or trust. other expense (bundled fee) must be allocated between the
costs that are incurred commonly or customarily by
In determining whether a cost is deductible by an estate or individuals, such costs not being deductible, and costs that
non-grantor trust, it must be determined whether the cost are not incurred commonly or customarily by individuals,
would be “commonly or customarily” incurred by a such costs being deductible.
hypothetical individual owning the same property. If the cost
would be deductible by a hypothetical individual, it is not There is an exception to the allocation rule if a bundled fee
deductible by the estate or non-grantor trust. is not computed on an hourly basis. In this situation, only the
portion of that fee that is attributable to investment advice is
It is the type of product or service rendered to the estate or not deductible. The remaining portion deductible.is
non-grantor trust in exchange for the cost, rather than the
description of the cost of that product or service, that is Out-of-pocket expenses billed to the estate or non-grantor
determinative. trust are treated as separate from the bundled fee and are
not subject to allocation.
Costs that are incurred commonly or customarily by
individuals include costs incurred in defense of a claim Estates and non-grantor trusts cannot deduct payments
against the estate, the decedent, or the non-grantor trust that made from the bundled fee to third parties if such payments
are unrelated to the existence, validity, or administration of would not have been deductible if they had been paid directly
the estate or trust. These amounts are not allowable by the estate or non-grantor trust.
deductions. Any reasonable method may be used to allocate a
bundled fee, including without limitation the allocation of a
Ownership costs. Ownership costs are costs that are
portion of a fiduciary commission that is a bundled fee to
chargeable to or incurred by an owner of property simply by
investment advice. For more information, see Regulations
reason of being the owner of the property. These costs are
section 1.67-4(c)(4).
commonly or customarily incurred by a hypothetical
individual owner of such property and are not deductible by Note. The reasonable method standard does not apply to
an estate or non-grantor trust. Under section 67(b), they determine the portion of the bundled fee attributable to
include, but are not limited to, condominium fees, insurance payments made to third parties for commonly or customarily
premiums, maintenance and lawn services, automobile incurred by an individual or to any other separately assessed
registration and insurance costs, and partnership costs expense commonly or customarily incurred by an individual,
deemed to be passed through to and reportable by a partner. because those payments and expenses are readily
Other expenses incurred merely by reason of the ownership identifiable without any discretion on the part of the fiduciary
of property may be fully deductible under other provisions of or return preparer.
the Code. For more information, see Regulations section 1.67-4.
Appraisal fees. Appraisal fees incurred to determine the
FMV of assets as of the decedent's date of death (or the Other deductions reported on line 15a.
alternate valuation date), to determine value for purposes of
making distributions, or as otherwise required to properly Bond premium(s). For taxable bonds acquired before
prepare the estate's or trust's tax returns, or a GST tax return, October 23, 1986, if the fiduciary elected to amortize the
are not incurred commonly or customarily by an individual premium, report the amortization on this line. If you made the
and are deductible. The cost of appraisals for other purposes election to amortize the premium, the basis in the taxable
(for example, insurance) is commonly or customarily incurred bond must be reduced by the amount of amortization.
by individuals and is not an allowable deduction. For tax-exempt bonds, you can't deduct the premium that
is amortized. Although the premium can't be deducted, you
Investment advisory fees. Fees for investment advice, must amortize the tax-exempt bond by the amount of
including any related services that would be provided to any premium amortized.
individual investor as part of an investment advisory fee, are
incurred commonly or customarily by a hypothetical For more information, see section 171 and Pub. 550.
individual investor and are not deductible. However, certain If you claim a bond premium deduction for the estate or
incremental costs of investment advice beyond the amount trust, figure the deduction on a separate sheet and attach it to
that would normally be charged to an individual investor are Form 1041.
deductible. Casualty and theft losses. Use Form 4684, Casualties and
An incremental cost is a special, additional charge that is Thefts, to figure any deductible casualty and theft losses.
added solely because the investment advice is rendered to a
trust or estate rather than to an individual, including Estate's or trust's share of amortization, depreciation,
balancing beyond the usual varying interests of current and depletion not claimed elsewhere. If you can't deduct
beneficiaries and remaindermen. The deductible portion of the estate's or trust's apportioned share of amortization,
the investment advisory fees is limited to the amount of those depreciation, and depletion as rent or royalty expenses on
fees, if any, that exceeds the fees normally charged to an Schedule E (Form 1040), or as business or farm expenses
individual investor. See Regulations section 1.67-4(b)(4). on Schedule C or F (Form 1040), itemize the estate's or
trust's apportioned share of the deductions on an attached
Bundled fees. If an estate or non-grantor trust pays a single sheet and include them on line 15a.
fee, commission, or other expense, such as a fiduciary's
commission, attorney's fee, or accountant's fee for both costs

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Note. Don't report the beneficiary's apportioned share of If you claim a deduction for estate tax attributable to
depreciation, depletion, and amortization on line 15a. Report ! qualified dividends or capital gains, you may have to
the beneficiary's apportioned share of deductions in box 9 of CAUTION adjust the amount on Form 1041, page 1, line 2b(2);
Schedule K-1 (Form 1041). or Schedule D (Form 1041), line 22.
Itemize each beneficiary's apportioned share of the
deductions and report them in the appropriate box of Also, a deduction is allowed for the GST tax imposed as a
Schedule K-1 (Form 1041). result of a taxable termination or a direct skip occurring as a
result of the death of the transferor. See section 691(c)(3).
Section 179D. Enter any applicable deduction under Enter the estate's or trust's share of these deductions on
section 179D for costs of energy efficient commercial line 19.
business property placed in service during the tax year.
Complete and attach Form 7205, Energy Efficient Line 20—Qualified Business Income Deduction
Commercial Buildings Deduction. To figure your QBI deduction, use Form 8995 or Form
8995-A, as applicable.
Line 15b—Net Operating Loss Deduction

An estate or trust is allowed a net operating loss deduction Use Form 8995 if:
(NOLD) under section 172. • You have QBI (loss), real estate investment trust (REIT)
If you claim an NOLD for the estate or trust, figure the dividends, or PTP income (loss);
deduction on a separate sheet and attach it to the return. • Your 2022 taxable income before the QBI deduction is less
than or equal to $170,050; and
Line 18—Income Distribution Deduction • You aren’t a patron in a specified agricultural or
If the estate or trust was required to distribute income horticultural cooperative.
currently or if it paid, credited, or was required to distribute
any other amounts to beneficiaries during the tax year, If you don’t meet these requirements, use Form 8995-A.
complete Schedule B to determine the estate's or trust's Attach whichever form you use (Form 8995 or 8995-A) to
income distribution deduction. However, if you are filing for a your return. Also attach Schedule C, E, or F (Form 1040),
pooled income fund, don't complete Schedule B. Instead, whichever form you use to report information about your QBI.
attach a statement to support the computation of the income See the instructions for Forms 8995 and 8995-A for more
distribution deduction. For more information, see Pooled information for figuring and reporting your QBI deduction.
Income Funds, earlier. Note. Report the beneficiary’s apportioned share of items of
If the estate or trust claims an income distribution QBI (loss) subject to beneficiary specific determinations, W-2
deduction, complete and attach: wages, unadjusted basis immediately after acquisition
• Part I (through line 24) and Part II of Schedule I (Form (UBIA) of qualified property, qualified REIT dividends, and
1041) to refigure the deduction on a minimum tax basis, and qualified PTP income on a statement attached to
• Schedule K-1 (Form 1041) for each beneficiary to which a Schedule K-1 (Form 1041). See the instructions for box 14,
distribution was made or required to be made. code I, of Schedule K-1 (Form 1041), later.

Cemetery perpetual care fund. On line 18, deduct the Line 21—Exemption
amount, not more than $5 per gravesite, paid for
maintenance of cemetery property. To the right of the entry Decedents' estates. A decedent's estate is allowed a $600
space for line 18, enter the number of gravesites. Also enter exemption.
“Section 642(i) trust” in parentheses after the trust's name at Trusts required to distribute all income currently. A
the top of Form 1041. You don't have to complete Schedules trust whose governing instrument requires that all income be
B of Form 1041 and K-1 (Form 1041). distributed currently is allowed a $300 exemption, even if it
Don't enter less than zero on line 18. distributed amounts other than income during the tax year.
Qualified disability trusts. A qualified disability trust is
Line 19—Estate Tax Deduction Including
allowed a $4,400 exemption. This amount is not subject to
Certain Generation-Skipping Transfer Taxes phaseout.
If the estate or trust includes IRD in its gross income, and A qualified disability trust is any trust:
such amount was included in the decedent's gross estate for
estate tax purposes, the estate or trust is allowed to deduct in 1. Described in 42 U.S.C. 1396p(c)(2)(B)(iv) and
the same tax year that the income is included that portion of established solely for the benefit of an individual under 65
the estate tax imposed on the decedent's estate that is years of age who is disabled, and
attributable to the inclusion of the IRD in the decedent's 2. All of the beneficiaries of which are determined by the
estate. For an example of the computation, see Regulations Commissioner of Social Security to have been disabled for
section 1.691(c)-1 and Pub. 559. some part of the tax year within the meaning of 42 U.S.C.
1382c(a)(3).
If any amount properly paid, credited, or required to be
distributed by an estate or trust to a beneficiary consists of A trust will not fail to meet item 2 above just because the
IRD received by the estate or trust, don't include such trust's corpus may revert to a person who isn't disabled after
amounts in determining the estate tax deduction for the the trust ceases to have any disabled beneficiaries.
estate or trust. Figure the deduction on a separate sheet. All other trusts. A trust not described above is allowed a
Attach the sheet to your return. $100 exemption.

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Note. The penalty may be waived or reduced under certain
Tax and Payments
conditions. See Pub. 505, Tax Withholding and Estimated
Tax, and the Instructions for Form 2210 for details.
Line 23—Taxable Income
Minimum taxable income. Line 23 can't be less than the Line 28—Tax Due
larger of: You must pay the tax in full when the return is filed. You may
• The inversion gain of the estate or trust, as figured under pay by EFTPS. For more information about EFTPS, see
section 7874, if the estate or trust is an expatriated entity or a Electronic Deposits, earlier. Also, you may pay by check or
partner in an expatriated entity; or money order or by credit or debit card.
• The sum of the excess inclusions of the estate or trust from
Schedule Q (Form 1066), Quarterly Notice to Residual To pay by check or money order.
Interest Holder of REMIC Taxable Income or Net Loss If you pay by check or money order:
Allocation, line 2c. • Make it payable to “United States Treasury”;
• Make sure the name of the estate or trust appears on the
Net operating loss (NOL). If line 23 (figured without regard payment;
to the minimum taxable income rule stated above) is a loss, • Write the estate’s or trust’s EIN and “2022 Form 1041” on
the estate or trust may have an NOL. Don't include the the payment;
deductions claimed on lines 13, 18, and 21 when figuring the • Consider completing the 2022 Form 1041-V; and
amount of the NOL. • Enclose, but don't attach, the payment (and Form 1041-V,
Generally, an NOL can only be carried forward to if completed) with Form 1041.
subsequent years and cannot be carried back. The 2-year Note. The IRS can't accept a single check (including a
carryback period only applies to the portion of an NOL cashier's check) for amounts of $100,000,000 ($100 million)
attributable to a farming loss. For more information, see Pub. or more. If you're sending $100 million or more by check,
536. you'll need to spread the payments over two or more checks
Complete Schedule A of Form 1045, Application for with each check made out for an amount less than $100
Tentative Refund, to figure the amount of the NOL that is million. The $100 million or more amount limit doesn't apply
available for carryback or carryover. Use Form 1045 or file an to other methods of payment (such as electronic payments),
amended return to apply for a refund based on an NOL so please consider paying by means other than checks.
carryback. For more information, see the Instructions for To pay by credit or debit card.
Form 1045. For information on paying your taxes electronically, including
On the termination of the estate or trust, any unused NOL by credit or debit card, go to IRS.gov/E-pay.
carryover that would be allowable to the estate or trust in a
later tax year but for the termination is allowed to the Line 30a—Credited to 2023 Estimated Tax
beneficiaries succeeding to the property of the estate or trust. Enter the amount from line 29 that you want applied to the
See the instructions for box 11, codes E and F, of estate's or trust's 2023 estimated tax.
Schedule K-1 (Form 1041), later.
Excess deductions on termination. If the estate or trust Schedule A—Charitable Deduction
has for its final year deductions (excluding the charitable
deduction and personal exemption) in excess of its gross General Instructions
income, the excess deductions are allowed to the Generally, any part of the gross income of an estate or trust
beneficiaries succeeding to the property of the estate or trust (other than a simple trust) that, under the terms of the will or
and retain their separate character as an amount allowed in governing instrument, is paid (or treated as paid) during the
arriving at AGI, a non-miscellaneous itemized deduction, or a tax year for a charitable purpose specified in section 170(c) is
miscellaneous itemized deduction. In general, an unused allowed as a deduction to the estate or trust. It isn't
NOL carryover that is allowed to beneficiaries (as explained necessary that the charitable organization be created or
above) can't also be treated as an excess deduction. organized in the United States.
However, if the final year of the estate or trust is also the last
year of the NOL carryover period, the NOL carryover not A pooled income fund or a section 4947(a)(1) nonexempt
absorbed in that tax year by the estate or trust is included as charitable trust treated as a private foundation must attach a
an excess deduction. See the instructions for box 11, codes separate sheet to Form 1041 instead of using Schedule A of
A and B, of Schedule K-1 (Form 1041), later. Form 1041 to figure the charitable deduction.
Additional return to be filed by trusts. Trusts, other than
Line 25—Current Payment on Deferred Net 965 split-interest trusts or nonexempt charitable trusts, that claim
Tax Liability a charitable deduction also file Form 1041-A unless the trust
If you made a payment with respect to a current net 965 tax is required to distribute currently to the beneficiaries all the
liability, enter the amount of the payment from Form 965-A, income for the year determined under section 643(b) and
Part II, column (k). related regulations.
Pooled income funds and charitable lead trusts also file
Line 27—Estimated Tax Penalty Form 5227. See Form 5227 for information about any
If line 28 is at least $1,000 and more than 10% of the tax exceptions.
shown on Form 1041, or the estate or trust underpaid its
Election to treat contributions as paid in the prior tax
2022 estimated tax liability for any payment period, it may
year. The fiduciary of an estate or trust may elect to treat as
owe a penalty. See Form 2210 to determine whether the
paid during the tax year any amount of gross income
estate or trust owes a penalty and to figure the amount of the
received during that tax year or any prior tax year that was
penalty.
paid in the next tax year for a charitable purpose.

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For example, if a calendar year estate or trust makes a Also, certain testamentary trusts that were established by
qualified charitable contribution on February 7, 2023, from a will that was executed on or before October 9, 1969, may
income earned in 2022 or prior, then the fiduciary can elect to qualify. See Regulations section 1.642(c)-2(b).
treat the contribution as paid in 2022.
To make the election, the fiduciary must file a statement Don't include any capital gains for the tax year allocated to
with Form 1041 for the tax year in which the contribution is corpus and paid or permanently set aside for charitable
treated as paid. This statement must include: purposes. Instead, enter these amounts on line 4.
1. The name and address of the fiduciary;
2. The name of the estate or trust; Line 2—Tax-Exempt Income Allocable to
Charitable Contributions
3. An indication that the fiduciary is making an election
under section 642(c)(1) for contributions treated as paid
during such tax year; Any estate or trust that pays or sets aside any part of its
income for a charitable purpose must reduce the deduction
4. The name and address of each organization to which by the portion allocable to any tax-exempt income. If the
any such contribution is paid; and governing instrument specifically provides as to the source
5. The amount of each contribution and date of actual from which amounts are paid, permanently set aside, or to be
payment or, if applicable, the total amount of contributions used for charitable purposes, the specific provisions control.
paid to each organization during the next tax year, to be In all other cases, determine the amount of tax-exempt
treated as paid in the prior tax year. income allocable to charitable contributions by multiplying
The election must be filed by the due date (including line 1 by a fraction, the numerator of which is the total
extensions) for Form 1041 for the next tax year. If the original tax-exempt income of the estate or trust, and the
return was filed on time, you may make the election on an denominator of which is the gross income of the estate or
amended return filed no later than 6 months after the due trust. Don't include in the denominator any losses allocated
date of the return (excluding extensions). Enter “Filed to corpus.
pursuant to section 301.9100-2” at the top of the amended
return and file it at the same address you used for your Line 4—Capital Gains for the Tax Year Allocated to
original return. Corpus and Paid or Permanently Set Aside for
For more information about the charitable deduction, see Charitable Purposes
section 642(c) and the related regulations.
Enter the total of all capital gains for the tax year that are:
Specific Instructions • Allocated to corpus, and
Line 1—Amounts Paid or Permanently Set Aside • Paid or permanently set aside for charitable purposes.
for Charitable Purposes From Gross Income
Line 6—Section 1202 Exclusion Allocable to
Enter amounts that were paid for a charitable purpose out of Capital Gains Paid or Permanently Set Aside for
the estate's or trust's gross income, including any capital Charitable Purposes
gains that are attributable to income under the governing
instrument or local law. Include amounts paid during the tax
If the exclusion of gain from the sale or exchange of qualified
year from gross income received in a prior tax year, but only
small business (QSB) stock was claimed, enter the part of
if no deduction was allowed for any prior tax year for these
the gain included on Schedule A, lines 1 and 4, that was
amounts.
excluded under section 1202.
Estates, and certain trusts, may claim a deduction for
amounts permanently set aside for a charitable purpose from Schedule B—Income Distribution
gross income. Such amounts must be permanently set aside
during the tax year to be used exclusively for religious, Deduction
charitable, scientific, literary, or educational purposes, or for
the prevention of cruelty to children or animals, or for the General Instructions
establishment, acquisition, maintenance, or operation of a If the estate or trust was required to distribute income
public cemetery not operated for profit. currently or if it paid, credited, or was required to distribute
any other amounts to beneficiaries during the tax year,
For a trust to qualify, the trust may not be a simple trust, complete Schedule B to determine the estate's or trust's
and the set aside amounts must be required by the terms of a income distribution deduction.
trust instrument that was created on or before October 9,
1969. Note. Use Schedule I (Form 1041) to compute the DNI and
income distribution deduction on a minimum tax basis.
Further, the trust instrument must provide for an
irrevocable remainder interest to be transferred to or for the Pooled income funds. Don't complete Schedule B for
use of an organization described in section 170(c); or the these funds. Instead, attach a separate statement to support
trust must have been created by a grantor who was at all the computation of the income distribution deduction. See
times after October 9, 1969, under a mental disability to Pooled Income Funds, earlier, for more information.
change the terms of the trust. Separate share rule. If a single trust or an estate has more
than one beneficiary, and if different beneficiaries have
substantially separate and independent shares, their shares
are treated as separate trusts or estates for the sole purpose

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of determining the DNI allocable to the respective on line 3. If the amount on Schedule D (Form 1041), line 19,
beneficiaries. column (1), is a net loss, enter zero.
If the separate share rule applies, figure the DNI allocable
to each beneficiary on a separate sheet and attach the sheet If the exclusion of gain from the sale or exchange of QSB
to this return. Any deduction or loss that is applicable solely stock was claimed, don't reduce the gain on line 3 by any
to one separate share of the trust or estate isn't available to amount excluded under section 1202.
any other share of the same trust or estate.
For more information, see section 663(c) and related Line 5
regulations.
In figuring the amount of long-term and short-term capital
Withholding of tax on foreign persons. The fiduciary may gain for the tax year included on Schedule A, line 1, the
be liable for withholding tax on distributions to beneficiaries specific provisions of the governing instrument control if the
who are foreign persons. For more information, see Pub. instrument specifically provides as to the source from which
515, and Forms 1042 and 1042-S. amounts are paid, permanently set aside, or to be used for
charitable purposes.
Specific Instructions
Line 1—Adjusted Total Income In all other cases, determine the amount to enter by
multiplying line 1 of Schedule A by a fraction, the numerator
Generally, enter on Schedule B, line 1, the amount from of which is the amount of net capital gains that are included in
line 17 on page 1 of Form 1041. However, if both line 4 and the accounting income of the estate or trust (that is, not
line 17 on page 1 of Form 1041 are losses, enter on allocated to corpus) and are distributed to charities, and the
Schedule B, line 1, the smaller of those losses. If line 4 is denominator of which is all items of income (including the
zero or a gain and line 17 is a loss, enter zero on line 1 of amount of such net capital gains) included in the DNI.
Schedule B.
Reduce the amount on line 5 by any allocable section
If you are filing for a simple trust, subtract from adjusted 1202 exclusion.
total income any extraordinary dividends or taxable stock
dividends included on page 1, line 2, and determined under Line 8—Accounting Income
the governing instrument and applicable local law to be
allocable to corpus. If you are filing for a decedent's estate or a simple trust, skip
this line. If you are filing for a complex trust, enter the income
Line 2—Adjusted Tax-Exempt Interest for the tax year determined under the terms of the governing
instrument and applicable local law. Don't include
To figure the adjusted tax-exempt interest, follow the steps extraordinary dividends or taxable stock dividends
below. determined under the governing instrument and applicable
local law to be allocable to corpus.
Step 1. Add tax-exempt interest income on line 2 of
Schedule A, any expenses allowable under section 212 Lines 9 and 10
allocable to tax-exempt interest, and any interest expense
allocable to tax-exempt interest. Don't include any:
• Amount that was deducted on the prior year's return that
Step 2. Subtract the Step 1 total from the amount of was required to be distributed in the prior year,
tax-exempt interest (including exempt-interest dividends) • Amount that is paid or permanently set aside for charitable
received. purposes or otherwise qualifying for the charitable deduction,
or
Section 212 expenses that are directly allocable to
tax-exempt interest are allocated only to tax-exempt interest. • Amount that is properly paid or credited as a gift or
bequest of a specific amount of money or specific property.
A reasonable proportion of section 212 expenses that are

indirectly allocable to both tax-exempt interest and other
Note. An amount that can be paid or credited only from
income must be allocated to each class of income.
income isn't considered a gift or bequest. Also, to qualify as a
Figure the interest expense allocable to tax-exempt gift or bequest, the amount must be paid in three or fewer
interest according to the guidelines in Rev. Proc. 72-18, installments.
1972-1 C.B. 740.
Line 9—Income Required To Be Distributed
See Regulations sections 1.643(a)-5 and 1.265-1 for more Currently
information.
Line 9 is to be completed by all simple trusts as well as
Line 3 complex trusts and decedents’ estates that are required to
distribute income currently, whether it is distributed or not.
Include all capital gains, whether or not distributed, that are The determination of whether trust income is required to be
attributable to income under the governing instrument or local distributed currently depends on the terms of the governing
law. For example, if the trustee distributed 50% of the current instrument and the applicable local law.
year's capital gains to the income beneficiaries (and reflects
this amount on Schedule D (Form 1041), line 19, column (1)), The line 9 distributions are referred to as “first-tier
but under the governing instrument all capital gains are distributions” and are deductible by the estate or trust to the
attributable to income, then include 100% of the capital gains extent of the DNI. The beneficiary includes such amounts in

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their income to the extent of their proportionate share of the If tax-exempt interest is the only tax-exempt income
DNI. included in the total distributions (line 11), and the DNI is
more than line 11 (that is, the estate or trust made a
Line 10—Other Amounts Paid, Credited, or distribution that is less than the DNI), then figure the
adjustment by multiplying line 2 by a fraction, the numerator
Otherwise Required To Be Distributed
of which is the total distributions (line 11), and the
Line 10 is to be completed only by a decedent's estate or denominator of which is the DNI (line 7). Enter the result on
complex trust. These distributions consist of any other line 12.
amounts paid, credited, or required to be distributed and are If line 11 includes tax-exempt income other than
referred to as “second-tier distributions.” Such amounts tax-exempt interest, figure line 12 by subtracting the total of
include annuities to the extent not paid out of income, the following from tax-exempt income included on line 11.
mandatory and discretionary distributions of corpus, and
distributions of property in kind. 1. The charitable contribution deduction allocable to such
tax-exempt income.
If Form 1041-T was timely filed to elect to treat estimated 2. Expenses allocable to tax-exempt income.
tax payments as made by a beneficiary, the payments are
treated as paid or credited to the beneficiary on the last day Expenses that are directly allocable to tax-exempt income
of the tax year and must be included on line 10. are allocated only to tax-exempt income. A reasonable
proportion of expenses indirectly allocable to both
Unless a section 643(e)(3) election is made, the value of tax-exempt income and other income must be allocated to
all noncash property actually paid, credited, or required to be each class of income.
distributed to any beneficiaries is the smaller of:
1. The estate's or trust's adjusted basis in the property Schedule G—Tax Computation and
immediately before distribution, plus any gain or minus any
loss recognized by the estate or trust on the distribution Payments
(basis of beneficiary); or
2. The FMV of such property. Part I—Tax Computation

If a section 643(e)(3) election is made by the fiduciary, then Line 1a
the amount entered on line 10 will be the FMV of the
property. 2022 Tax Rate Schedule. For tax years beginning in 2022,
figure the tax using the following Tax Rate Schedule and
A fiduciary of a complex trust or a decedent's estate may enter the tax on line 1a. However, see the Instructions for
elect to treat any amount paid or credited to a beneficiary Schedule D (Form 1041) and the Qualified Dividends Tax
within 65 days following the close of the tax year as being Worksheet, later.
paid or credited on the last day of that tax year. To make this
election, see Question 6 under Other Information, later. 2022 Tax Rate Schedule
If taxable
The beneficiary includes the amounts on line 10 in their income is:
Of the
income only to the extent of their proportionate share of the Over— But not over Its tax is: amount over
DNI. — —
Complex trusts. If the second-tier distributions exceed the $0 $2,750 10% $0
2,750 9,850 $275 + 24% 2,750
DNI allocable to the second tier, the trust may have an 9,850 13,450 $1,979 + 35% 9,850
accumulation distribution. See the line 11 instructions below. 13,450 ----- $3,239 + 37% 13,450

Line 11—Total Distributions
Schedule D (Form 1041) and Schedule D Tax Work-
If line 11 is more than line 8, and you are filing for a complex sheet. Use Part V of Schedule D (Form 1041), or the
trust that has previously accumulated income, see the Schedule D Tax Worksheet, whichever is applicable, to
instructions for Schedule J, later, to see if you must complete figure the estate's or trust's tax if the estate or trust files
Schedule J (Form 1041), Accumulation Distribution for Schedule D (Form 1041) and has:
Certain Complex Trusts. • A net capital gain and any taxable income, or
• Qualified dividends on line 2b(2) of Form 1041 and any
Line 12—Adjustment for Tax-Exempt Income taxable income.
In figuring the income distribution deduction, the estate or Qualified Dividends Tax Worksheet. If you don't have to
trust isn't allowed a deduction for any item of the DNI that complete Part I or Part II of Schedule D and the estate or trust
isn't included in the gross income of the estate or trust. Thus, has an amount entered on line 2b(2) of Form 1041 and any
for purposes of figuring the allowable income distribution taxable income (line 23), then figure the estate's or trust's tax
deduction, the DNI (line 7) is figured without regard to any using the worksheet, later, and enter the tax on line 1a.
tax-exempt interest. Note. You must reduce the amount you enter on line 2b(2)
If tax-exempt interest is the only tax-exempt income of Form 1041 by the portion of the section 691(c) deduction
included in the total distributions (line 11), and the DNI claimed on line 19 of Form 1041 if the estate or trust received
(line 7) is less than or equal to line 11, then enter on line 12 qualified dividends that were IRD.
the amount from line 2.

Instructions for Form 1041 (2022) -31-

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Qualified Dividends Tax Worksheet—Schedule G, Part I, Line 1a                                                                 Keep for Your Records
Caution: Don’t use this worksheet if the estate or trust must complete Schedule D (Form 1041).
  1. Enter the amount from Form 1041, line 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  1.   
  2. Enter the amount from Form 1041, line 2b(2) . . . . . . . .                             2.  
  3. If you are claiming investment interest expense on Form 
     4952, enter the amount from line 4g; otherwise, 
     enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.  
  4. Subtract line 3 from line 2. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . .                 4.   
  5. Subtract line 4 from line 1. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . .                 5.   
  6. Enter the smaller of the amount on line 1 or $2,800  . . . . . . . . . . . . . . . . . . . .                        6.   
  7. Enter the smaller of the amount on line 5 or line 6 . . . . . . . . . . . . . . . . . . . . . .                     7.   
  8. Subtract line 7 from line 6. If zero or less, enter -0-. This amount is taxed at 0% . . . . . . . . . . . . . . . .                                   8.    
  9. Enter the smaller of line 1 or line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         9.   
10.  Subtract line 8 from line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     10.  
11.  Enter the smaller of line 1 or $13,700 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              11.  
12.  Add lines 5 and 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.  
13.  Subtract line 12 from line 11. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . .                   13.  
14.  Enter the smaller of line 10 or line 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             14.  
15.  Multiply line 14 by 15% (0.15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      15.  
16.  Enter the amount from line 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        16.  
17.  Add lines 8 and 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17.  
18.  Subtract line 17 from line 16. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . .                   18.  
19.  Multiply line 18 by 20% (0.20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      19.  
20.  Figure the tax on the amount on line 5. Use the 2022 Tax Rate Schedule . . . . . . . . . . . . . . . . . . . . .                                      20.  
21.  Add lines 15, 19, and 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    21.  
22.  Figure the tax on the amount on line 1. Use the 2022 Tax Rate Schedule . . . . . . . . . . . . . . . . . . . . .                                      22.  
23.  Tax on all taxable income. Enter the smaller of line 21 or line 22 here and on 
     Schedule G, line 1a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.  

Line 1c—Alternative Minimum Tax. Attach Schedule I                                           Line 2b—General Business Credit
(Form 1041) if any of the following apply.                                                              Don't include any amounts that are allocated to a 
• The estate or trust must complete Schedule B.                                                   !     beneficiary. Credits that are allocated between the 
• The estate or trust claims a credit on line 2b, 2c, or 2d of                                  CAUTION estate or trust and the beneficiaries are listed in the 
Schedule G.                                                                                  instructions for Schedule K-1, box 13, later. Generally, these 
• The estate's or trust's share of alternative minimum taxable                               credits are apportioned on the basis of the income allocable 
income (line 27 of Schedule I (Form 1041)) exceeds                                           to the estate or trust and the beneficiaries.
$26,500.
Enter the amount from line 54 of Schedule I (Form 1041) on                                        Enter on line 2b the estate's or trust's total general 
line 1c.                                                                                     business credit allowed for the current year from Form 3800. 
                                                                                             The estate or trust must file Form 3800 to claim any of the 
Line 1d—Total. If the amount from line 14 of Form 8978 is a                                  general business credits. Generally, if the estate's or trust's 
positive amount, include it in the total reported on line 1d.                                only source of a credit is from a pass-through entity and the 
                                                                                             beneficiary isn't entitled to an allocable share of a credit, you 
Line 2a—Foreign Tax Credit                                                                   aren't required to complete the source form for that credit. 
Attach Form 1116, Foreign Tax Credit (Individual, Estate, or                                 However, certain credits have limitations and special 
Trust), if you elect to claim credit for income or profits taxes                             computations that may require you to complete the source 
paid or accrued to a foreign country or a U.S. possession.                                   form. See the Instructions for Form 3800 for more 
The estate or trust may claim credit for that part of the foreign                            information.
taxes not allocable to the beneficiaries (including charitable 
beneficiaries). Enter the estate's or trust's share of the credit                            Line 2c—Credit for Prior Year Minimum Tax
on line 2a. See Pub. 514, Foreign Tax Credit for Individuals,                                An estate or trust that paid AMT in a previous year may be 
for details.                                                                                 eligible for a minimum tax credit in 2022. See Form 8801, 

                                                                                             -32-                             Instructions for Form 1041 (2022)

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ESBT Tax Worksheet—Schedule G, Part I, Line 4                                                                    Keep for Your Records
 ESBT Tax Computation
1.      Ordinary income (loss) from Schedule K-1 (Form 1120-S) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                           1.    
2a.     Total ordinary dividends from Schedule K-1 (Form 1120-S) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                             2a.   
2b.     Qualified dividends from Schedule K-1 (Form 1120-S) . . . . . . . . . . . . . . . . . . .          2b.   
3.      Capital gain. See instructions and attach Schedule D (Form 1041) . . . . . . . . . . . . . . . . . . . . . . . . . . . .                               3.    
4.      Other income (loss) reported on Schedule K-1 (Form 1120-S) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                               4.    
5.      Total income. Add lines 1, 2a, 3, and 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              5.    
6.      Other allowable deductions from Schedule K-1 (Form 1120-S) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                               6.    
7.      Administrative expenses (allocated to the S portion) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     7.    
8.      State and local income taxes (allocated to the S portion) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      8.    
9.      Interest expense on indebtedness to acquire S corporation stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                              9.    
10.     Charitable contribution deduction. Check here if deduction includes prior year carryover [    ] . . . . . .                                            10.  
11.     Qualified business income deduction (S portion). Attach Form 8995 or 8995-A . . . . . . . . . . . . . . . . .                                          11.  
12.     Total deductions. Add lines 6 through 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 12.  
13.     Taxable income (S portion). Subtract line 12 from line 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       13.  
14a.    Tax. Tax on taxable income. See instructions  . . . . . . . . . . . . . . . . . . . . . . . . .    14a.  
14b.    Alternative Minimum Tax (S portion). Attach Schedule I (Form 1041) . . . . . . .                   14b.  
14c.    Total. Add lines 14a and 14b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14c.        
15a.    Foreign tax credit (S portion). Attach Form 1116 . . . . . . . . . . . . . . . . . . . . . . . .   15a.  
15b.    General business credit (S portion). Attach Form 3800 . . . . . . . . . . . . . . . . . .          15b.  
15c.    Credit for prior year minimum tax (S portion). Attach Form 8801 . . . . . . . . . . .              15c.  
15d.    Bond credits (S portion). Attach Form 8912 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15d.  
15e.    Total credits. Add lines 15a through 15d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15e.                
16.     Recapture taxes (S portion). Check if from: Form 4255 [    ] or Form 8611 [    ]  . . . . . . . . . . . . . . . . . .                                  16.  
17.     Total ESBT tax. Subtract line 15e from line 14c and add line 16. Enter here and on Form 1041, 
        Schedule G, Part I, line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.  

Credit for Prior Year Minimum Tax—Individuals, Estates, and          See Electing Small Business Trusts (ESBTs), earlier, for 
Trusts.                                                              the special tax computation rules that apply to the portion of 
                                                                     an ESBT consisting of stock in one or more S corporations.
Line 2d—Bond Credits
Complete and attach Form 8912, Credit to Holders of Tax              Line 5—Net Investment Income Tax (NIIT)
Credit Bonds, if the estate or trust claims a credit for holding     Enter the amount of NIIT calculated and attach Form 8960. 
a tax credit bond. Also, be sure to include the credit in            See the Instructions for Form 8960 to calculate the tax, and 
interest income.                                                     Net Investment Income Tax (NIIT), later, for more 
                                                                     information.
Line 2e—Total Credits
To claim a credit allowable to the estate or trust other than        Line 6—Recapture Taxes
the credits entered on lines 2a through 2d, include the              Recapture of investment credit.             If the estate or trust 
allowable credit in the total for line 2e. Complete and attach       disposed of investment credit property or changed its use 
the appropriate form and enter the form number and amount            before the end of the recapture period, see Form 4255, 
of the allowable credit on the dotted line to the left of the entry  Recapture of Investment Credit, to figure the recapture tax 
space.                                                               allocable to the estate or trust. Include the tax on line 6 and 
                                                                     enter “ICR” on the dotted line to the left of the entry space.
If the amount from line 14 of Form 8978 is a negative 
amount, treat it as a positive amount and add it to the total        Recapture of low-income housing credit.                                                         If the estate or 
reported on line 2e.                                                 trust disposed of property (or there was a reduction in the 
                                                                     qualified basis of the property) on which the low-income 
Line 4—Tax on the ESBT Portion of the Trust                          housing credit was claimed, see Form 8611, Recapture of 
Use the ESBT Tax Worksheet, above, to figure the ESBT tax.           Low-Income Housing Credit, to figure any recapture tax 
Enter the amount from line 17 of the ESBT Tax Worksheet on           allocable to the estate or trust. Include the tax on line 6 and 
line 4.                                                              enter “LIHCR” on the dotted line to the left of the entry space.

Instructions for Form 1041 (2022)                                -33-

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Recapture of qualified electric vehicle credit. If the of the trust the triggered deferred net 965 tax liability from
estate or trust claimed the qualified electric vehicle credit in a Form 965-A, Part IV, column (f).
prior tax year for a vehicle that ceased to qualify for the Interest on deferred tax attributable to installment sales
credit, part or all of the credit may have to be recaptured. See of certain timeshares and residential lots and certain
Regulations section 1.30-1(b) for details. If the estate or trust nondealer real property installment obligations. If an
owes any recapture tax, include it on line 6 and enter obligation arising from the disposition of real property to
“QEVCR” on the dotted line to the left of the entry space. which section 453(l) or 453A applies is outstanding at the
Recapture of the new markets credit. If the estate or trust close of the year, the estate or trust must include the interest
owes any new markets recapture tax, include it on line 6 and due under section 453(l)(3)(B) or 453A(c), whichever is
enter “NMCR” on the dotted line to the left of the entry space. applicable, in the amount to be entered on Form 1041,
For more information, including how to figure the recapture Schedule G, line 8, with the notation “Section 453(l) interest”
amount, see section 45D(g). or “Section 453A(c) interest,” whichever is applicable. Attach
a schedule showing the computation.
Recapture of the credit for employer-provided childcare
facilities. If the facility ceased to operate as a qualified Form 4970, Tax on Accumulation Distribution of Trusts.
childcare facility or there was a change in ownership, part or Include on this line any tax due on an accumulation
all of the credit may have to be recaptured. See Form 8882, distribution from a trust. To the left of the entry space, enter
Credit for Employer-Provided Childcare Facilities and “From Form 4970” and the amount of the tax.
Services, for details. If the estate or trust owes any recapture Form 8697, Interest Computation Under the Look-Back
tax, include it on line 6 and enter “ECCFR” on the dotted line Method for Completed Long-Term Contracts. Include the
to the left of the entry space. interest due under the look-back method of section 460(b)
Recapture of the alternative motor vehicle credit. See (2). To the left of the entry space, enter “From Form 8697”
section 30B(h)(8) for details. Include the tax on line 6 and and the amount of interest due.
enter “AMVCR” on the dotted line to the left of the entry Form 8866, Interest Computation Under the Look-Back
space. Method for Property Depreciated Under the Income
Recapture of the alternative fuel vehicle refueling prop- Forecast Method. Include the interest due under the
erty credit. See section 30C(e)(5) for details. Include the look-back method of section 167(g)(2). To the left of the entry
tax on line 6 and enter “ARPCR” on the dotted line to the left space, enter “From Form 8866” and the amount of interest
of the entry space. due.
Interest on deferral of gain from certain constructive
Line 7—Household Employment Taxes ownership transactions. Include the interest due under
If any of the following apply, get Schedule H (Form 1040) and section 1260(b) on any deferral of gain from certain
its instructions to see if the estate or trust owes these taxes. constructive ownership transactions. To the left of the entry
1. The estate or trust paid any one household employee space, enter “1260(b)” and the amount of interest due.
cash wages of $2,400 or more in 2022. Cash wages include Form 5329, Additional Taxes on Qualified Plans (Includ-
wages paid by checks, money orders, etc. When figuring the ing IRAs) and Other Tax-Favored Accounts. If the estate
amount of cash wages paid, combine cash wages paid by or trust fails to receive the minimum distribution under section
the estate or trust with cash wages paid to the household 4974, use Form 5329 to pay the excise tax. To the left of the
employee in the same calendar year by the household of the entry space, enter “From Form 5329” and the amount of the
decedent or beneficiary for whom the administrator, tax.
executor, or trustee of the estate or trust is acting.
Additional tax on the early disposition of noncash prop-
2. The estate or trust withheld federal income tax during erty for which a section 247(g)(3) election was made by
2022 at the request of any household employee. an Alaska Native Settlement Trust. This additional 10%
3. The estate or trust paid total cash wages of $1,000 or tax only should be shown on an amended return filed by a
more in any calendar quarter of 2021 or 2022 to household Settlement Trust for the year in which the Settlement Trust
employees. received a contribution of noncash property from an Alaska
Enter on line 7 any household employment taxes owed Native Corporation and elected to defer the recognition of
from Schedule H (Form 1040), Part I, line 8d, or Part III, income related to such property, but disposed of the property
line 26. within the first tax year subsequent to the tax year the
Settlement Trust received the property. Determine the
Note. See Amended Schedule H (Form 1040 ) under F. increase in tax due to the inclusion of the deferred income
Initial Return, Amended Return, etc., earlier, for information and include on this line the additional tax due, equal to 10%
on filing an amended Schedule H (Form 1040) for a Form of the increase in tax due to the inclusion of the deferred
1041. income. The increase in tax due to the inclusion of the
deferred income, which is the base amount for the
Line 8—Other Taxes and Amounts Due computation of the additional 10% tax shown on this line,
should be shown elsewhere on Schedule G. If the amended
Triggering event under section 965(i). If you had a return also shows changes to income, deductions, or credits
triggering event under section 965(i) during the year, enter on unrelated to the inclusion of the deferred income, attach a
line 8 the current year tax liability from the triggered deferred schedule showing the computation of the additional tax due
net 965 tax liability from Form 965-A, Part IV, column (f). only to the inclusion of the deferred income. To the left of the
ESBTs. If a triggering event occurred in the S portion of entry space, enter “Section 247(g)(3) tax.”
the ESBT, also include on the attachment that shows the
Form 8978 Worksheet. If you have a negative amount from
amount of the net 965 tax liability attributable to the S portion
Form 8978, line 14, that was not used to reduce Schedule G,

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Form 8978 Worksheet—Schedule G, Part I, Line 8                                          Keep for Your Records
Use this worksheet if (a) Schedule G, line 3, is zero, (b) after line 3 was reduced to zero, you have a negative 
amount from Form 8978, line 14 that was not used to reduce line 3 to zero, and (c) you have chapter 1 taxes 
entered on Schedule G, line 4; Schedule G, line 6; Schedule G, line 8; and/or tax and interest from Form 8621.
1.      Enter the total amount of chapter 1 taxes from Schedule G, line 4; Schedule G, line 6; Schedule G, 
        line 8; and tax and interest from Form 8621 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                          1.  
2.      Enter the negative amount from Form 8978, line 14, that has not already been used to reduce 
        Schedule G, line 3, to zero . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                2. (   )
3.      Combine line 1 and line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                3.  
4.      Enter the amount of non-chapter 1 taxes included on Schedule G, line 8  . . . . . . . . . . . . . . . . . . . . .                                                4.  
5.      If line 3 is negative, enter as a negative the amount from line 1. Otherwise, enter the amount from 
        line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. (   )
6.      Combine line 4 and line 5. Enter the result on Schedule G, line 8. This amount may be a negative 
        number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     6.  

line 3, to zero, and you have chapter 1 taxes and/or tax and        have already filed Form 1041-T, don't attach a copy to your 
interest from Form 8621, Information Return by a                    return.
Shareholder of a Passive Foreign Investment Company or 
                                                                             Failure to file Form 1041-T by the due date (March 6, 
Qualified Electing Fund, then complete the Form 8978 
                                                                             2023, for calendar year estates and trusts) will result 
Worksheet—Schedule G, Part I, Line 8 to figure the amount           CAUTION!
                                                                             in an invalid election. An invalid election will require 
to enter on line 8.
                                                                    the filing of an amended Schedule K-1 for each beneficiary 
Line 9—Total Tax                                                    who was allocated a payment of estimated tax.
Add Schedule G, Part I, lines 3 through 8. Enter the total on 
Schedule G, Part I, line 9; and page 1 of Form 1041, line 24.       Line 13—Tax Paid With Form 7004
                                                                    If you filed Form 7004 to request an extension of time to file 
Part II—Payments                                                    Form 1041, enter the amount that you paid with the extension 
                                                                    request.
Line 10—2022 Estimated Tax Payments and 
Amount Applied From 2021 Return                                     Line 14—Federal Income Tax Withheld
Enter the amount of any estimated tax payment you made              Use line 14 to claim a credit for any federal income tax 
with Form 1041-ES for 2022 plus the amount of any                   withheld (and not repaid) by (a) an employer on wages and 
overpayment from the 2021 return that was applied to the            salaries of a decedent received by the decedent's estate; (b) 
2022 estimated tax.                                                 a payer of certain gambling winnings (for example, state 
                                                                    lottery winnings); or (c) a payer of distributions from 
If the estate or trust is the beneficiary of another trust and      pensions, annuities, retirement or profit-sharing plans, IRAs, 
received a payment of estimated tax that was credited to the        insurance contracts, etc., received by a decedent's estate or 
trust (as reflected on the Schedule K-1 issued to the trust),       trust. Attach a copy of Form W-2, Form W-2G, or Form 
then report this amount separately with the notation “Section       1099-R to the front of the return.
643(g)” in the space next to line 10 and include this amount 
                                                                             Except for backup withholding (as explained below), 
in the amount entered on line 10.
                                                                             withheld income tax can't be passed through to 
        Don't include on Form 1041 estimated tax paid by an         CAUTION! beneficiaries on either Schedule K-1 or Form 1041-T.

!       individual before death. Instead, include those 
CAUTION payments on the decedent's final income tax return.         Backup withholding. If the estate or trust received a 2022 
                                                                    Form 1099 showing federal income tax withheld (that is, 
Line 11—Estimated Tax Payments Allocated to                         backup withholding) on interest income, dividends, or other 
                                                                    income, check the box and include the amount withheld on 
Beneficiaries (From Form 1041-T)                                    income retained by the estate or trust in the total for line 14.
The trustee (or executor, for the final year of the estate) may     Report in box 13, code B, of Schedule K-1 (Form 1041) 
elect under section 643(g) to have any portion of its               any credit for backup withholding on income distributed to 
estimated tax treated as a payment of estimated tax made by         the beneficiary.
a beneficiary or beneficiaries. The election is made on Form 
1041-T, which must be filed by the 65th day after the close of      Line 15—Current Net 965 Tax Liability - Eligible 
the trust's tax year. Form 1041-T shows the amounts to be 
allocated to each beneficiary. This amount is reported in           for Installment Payment Election
box 13, code A, of the beneficiary's Schedule K-1 (Form             If you have a section 965(i) net tax liability for which a 
1041).                                                              triggering event has occurred in the current year and you are 
                                                                    making a section 965(h) election with respect to that section 
Attach Form 1041-T to your return only if you haven't yet           965 net tax liability, enter this amount from Form 965-A, Part 
filed it; however, attaching Form 1041-T to Form 1041               I, column (f).
doesn't extend the due date for filing Form 1041-T. If you 

Instructions for Form 1041 (2022)                               -35-

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Line 16a—Credit for Tax Paid on Undistributed allowed under section 642(c). In the case of an estate, trust,
Capital Gains or pooled income fund that has NII and non-NII income in a
year when a section 642(c) deduction is claimed, the amount
Attach Copy B of Form 2439, Notice to Shareholder of of the NII deduction allocable to the section 642(c) deduction
Undistributed Long-Term Capital Gains. will be less than the amount reported on Form 1041,
Schedule A, line 7 (or on the separate calculation in the case
Line 16b—Credit for Federal Tax on Fuels of a pooled income fund).
Enter any credit for federal excise taxes paid on fuels that are
ultimately used for nontaxable purposes (for example, an Beneficiary reporting. In general, the amount of the
off-highway business use). Attach Form 4136, Credit for income distribution deduction (from Form 1041, Schedule B,
Federal Tax Paid on Fuels. See Pub. 510, Excise Taxes, for line 15) that reduces the estate’s or trust’s NII will be the
more information. amount of NII that will be taxable to the beneficiaries on their
Schedules K-1 (Form 1041).
Line 17— Credit for Qualified Sick and Family The Schedule K-1 has code H in box 14 to report the
Leave Wages for Leave Taken Before April 1, amount of NII distributed to the beneficiary. The amount
2021 reported in code H represents an adjustment (either positive
or negative) that the beneficiary must use in completing its
Enter the refundable portion of the qualified sick and family Form 8960 (if necessary). In the case where the trust’s
leave credit from Schedule H (Form 1040), Part I, line 8e, on income distribution deduction allowed in calculating
line 17. undistributed NII is less than the amount on Schedule B,
line 15, then code H will show a negative number that is the
Line 18—Credit for Qualified Sick and Family
difference between the two amounts. In the case of an estate
Leave Wages for Leave Taken After March 31, or trust that issues more than one Schedule K-1 for a year,
2021, and before October 1, 2021 the sum of the amounts reported in code H on all of the
Enter the refundable portion of the qualified sick and family Schedules K-1 will be the difference between Schedule B,
leave credit from Schedule H (Form 1040), Part I, line 8f, on line 15, and the amount deducted on Form 8960, line 18b, for
line 18. amounts of NII distributed to a beneficiary.
The beneficiary's NII will equal all taxable amounts
Net Investment Income Tax (NIIT) TIP reported on the Schedule K-1, adjusted by the
Certain estates and trusts may be subject to the NIIT. Estates amount reported in box 14, code H.
and trusts use Form 8960 to report their net investment
The only instance where code H will be a positive
income (NII) and calculate the tax. The amount of NIIT
TIP number is when:
payable by the estate or trust is reported on Form 1041,
Schedule G, line 5.
• The estate or trust owns directly, or indirectly, an (a)
The NIIT is imposed on estates and trusts to the extent interest in a section 1291 fund, or (b) interest in a controlled
that they have undistributed NII and AGI exceeding $13,450. foreign corporation or qualified electing fund and no election
See Definitions, earlier, for the calculation of an estate’s or under Regulations section 1.1411-10(g) has been made with
trust’s AGI. The following types of estates and trusts may respect to that interest; and
owe the NIIT in addition to their regular income tax liability. • The distribution from one of the entities described above is
• Decedent’s estates. (a) NII to the estate or trust, but not included in its taxable
• Simple and complex trusts. income; and (b) the distributions from the estate or trust to
• ESBTs. the beneficiary(ies) in the year exceed the amount of the
• Pooled income funds. income distribution deduction allowed for regular tax
• Bankruptcy estates. purposes (from Schedule B, line 15).
However, in the case of bankruptcy estates, the AGI
threshold is $125,000. Special rules. In the final year of an estate or trust,
deductions in excess of income may be reported to the
Calculation of NII. In general, an estate’s or trust’s NII is beneficiary in box 11 of Schedule K-1. These deductions
calculated in the same way as an individual's. However, there may also be deductible by the beneficiary for NIIT purposes.
are special rules for the calculation of NII in the case of an In this situation, the terminating estate or trust should provide
ESBT. See the Instructions for Form 8960 and Regulations the beneficiary information regarding whether the amounts
section 1.1411-3(e) for information on the calculation (and reported in box 11, codes A through E, include any amounts
Regulations section 1.1411-3(c)(1) for information on the that are deductible for NIIT purposes. See Regulations
ESBT calculation). section 1.1411-4(g)(4).
Distributions on NII. The NIIT is imposed on estates and
trusts to the extent they have undistributed NII. In order to Other Information
arrive at the estate’s or trust’s undistributed NII, the estate’s
or trust’s NII is reduced for (1) distributions of NII to Question 1
beneficiaries, and (2) NII allocable to charities when the
If the estate or trust received tax-exempt income, figure the
estate or trust is allowed a deduction under section 642(c).
allocation of expenses between tax-exempt and taxable
The instructions for Form 8960, line 18b, provide more
income on a separate sheet and attach it to the return. Enter
information on the calculation of undistributed NII.
only the deductible amounts on the return. Don't figure the
NII allocable to the deduction under section 642(c). An allocation on the return itself. For more information, see
estate’s, trust’s, or pooled income fund’s NII is reduced by Allocation of Deductions for Tax-Exempt Income, earlier.
the amount of NII allocable to the charitable deduction

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Report the amount of tax-exempt interest income received seller-provided financing must include on an attachment to
or accrued in the space provided below Question 1. the 2022 Form 1041 the name, address, and TIN of the
person to whom the interest was paid or accrued (that is, the
Also, include any exempt-interest dividends the estate or seller).
trust received as a shareholder in a mutual fund or other
regulated investment company (RIC). If the estate or trust received or accrued such interest, it
must provide identical information on the person liable for
Question 2 such interest (that is, the buyer). This information doesn't
All salaries, wages, and other compensation for personal need to be reported if it duplicates information already
services must be included on the return of the person who reported on Form 1098.
earned the income, even if the income was irrevocably
Question 6
assigned to a trust by a contract assignment or similar
arrangement. To make the section 663(b) election to treat any amount paid
or credited to a beneficiary within 65 days following the close
The grantor or person creating the trust is considered the of the tax year as being paid or credited on the last day of
owner if they keep “beneficial enjoyment” of or substantial that tax year, check the box. This election can be made by
control over the trust property. The trust's income, the fiduciary of a complex trust or the executor of a
deductions, and credits are allocable to the owner. decedent's estate. For the election to be valid, you must file
Form 1041 by the due date (including extensions). Once
If you checked “Yes” for Question 2, see Special
made, the election is irrevocable.
Reporting Instructions, earlier.
Question 7
Question 3
To make the section 643(e)(3) election to recognize gain on
Check the “Yes” box and enter the name of the foreign
property distributed in kind, check the box and see the
country if either (1) or (2) below applies.
Instructions for Schedule D (Form 1041).
1. The estate or trust owns more than 50% of the stock in
any corporation that owns one or more foreign bank Question 9
accounts. Generally, a beneficiary is a skip person if the beneficiary is
2. At any time during the year, the estate or trust had an in a generation that is 2 or more generations below the
interest in or signature or other authority over a bank, generation of the transferor to the trust.
securities, or other financial account in a foreign country.
To determine if a beneficiary that is a trust is a skip
Exception. Check “No” if either of the following applies to person, and for exceptions to the general rules, see the
the estate or trust. definition of a skip person in the instructions for Schedule R
• The combined value of the accounts was $10,000 or less of Form 706.
during the whole year.
• The accounts were with a U.S. military banking facility Question 10
operated by a U.S. financial institution. A domestic trust that is a specified domestic entity must file
Form 8938 along with Form 1041 for the tax year. Form 8938
If you checked “Yes” for Question 3, electronically file
must be filed each year the value of the trust's specified
FinCEN Form 114, Report of Foreign Bank and Financial
foreign financial assets meets or exceeds the reporting
Accounts (FBAR), with the Department of the Treasury using
threshold. A trust exceeds the threshold amount if the total
FinCEN's BSA E-Filing System. Because FinCEN Form 114
value of the specified foreign financial assets is more than
isn't a tax form, don't file it with Form 1041.
$50,000 on the last day of the tax year or more than $75,000
See FinCEN.gov for more information. at any time during the tax year. For more information on
If you are required to file FinCEN Form 114 but don't, domestic trusts that are specified domestic entities, the filing
threshold, and the types of foreign financial assets that must
! you may have to pay a penalty of up to $10,000 (or be reported, see the Instructions for Form 8938.
CAUTION more in some cases).
A domestic trust that is required to file Form 8938 along
Question 4 with Form 1041 for the tax year must check “Yes” to Question
10.
The estate or trust may be required to file Form 3520, Annual
Return To Report Transactions With Foreign Trusts and Question 11a
Receipt of Certain Foreign Gifts, if:
• It directly or indirectly transferred property or money to a A distribution of S corporation stock by an estate or trust that
foreign trust—for this purpose, any U.S. person who created results in a change of ownership for federal income tax
a foreign trust is considered a transferor; purposes is a triggering event described in Regulations
• It is treated as the owner of any part of the assets of a section 1.965-7(c)(3). If the estate or trust transfers less than
foreign trust under the grantor trust rules; or all of its shares of stock of the S corporation, the transfer will
• It received a distribution from a foreign trust. be a triggering event only with respect to the portion of the
estate’s or trust’s section 965(i) net tax liability that is properly
An owner of a foreign trust must ensure that the trust allocable to the transferred shares. If the person who
TIP files an annual information return on Form 3520-A. received the distribution of S corporation stock is an eligible
section 965(i) transferee, the estate or trust may enter into a
transfer agreement with the eligible section 965(i) transferee
Question 5 to prevent the assessment of the estate’s or trust’s section
An estate or trust claiming an interest deduction for qualified 965(i) net tax liability in the tax year that includes the
residence interest (as defined in section 163(h)(3)) on triggering event.

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The estate or trust must report in Part IV, column (g), of
Form 965-A the transfer out of the section 965 tax liability Schedule J (Form
properly allocable to S corporation shares for which the
estate or trust entered into a transfer agreement with an 1041)—Accumulation Distribution for
eligible section 965(i) transferee. See the Instructions for Certain Complex Trusts
Form 965-A for additional information.
The transfer agreement must be filed within 30 days General Instructions
! of the triggering event. See Form 965-D, Transfer Use Schedule J (Form 1041) to report an accumulation
CAUTION Agreement Under Section 965(i)(2), and the related distribution for a domestic complex trust that was:
instructions for additional information. • Previously treated at any time as a foreign trust (unless an
exception is provided in future regulations); or
Question 11b • Created before March 1, 1984, unless that trust would not
be aggregated with other trusts under the rules of section
If the estate or trust distributed S corporation shares and the
643(f) if that section applied to the trust.
estate or trust did not enter into a timely transfer agreement
for all shares transferred during the tax year, the transfer of An accumulation distribution is the excess of amounts
shares not covered by a transfer agreement is a triggering properly paid, credited, or required to be distributed (other
event. See Triggering event under section 965(i), earlier. than income required to be distributed currently) over the DNI
The estate or trust may file a consent agreement under of the trust reduced by income required to be distributed
section 965(i)(4)(D) to make the election under section currently. To have an accumulation distribution, the
965(h) to pay in installments the triggered section 965(i) net distribution must exceed the accounting income of the trust.
tax liability. See Form 965-E, Consent Agreement Under
Section 965(i)(4)(D), and the related instructions for how to Specific Instructions
file the consent agreement. See Triggered deferred S Part I—Accumulation Distribution in 2022
corporation-related net 965 tax liability in Part I of the
instructions for Form 965-A for how to make the installment
election. Line 1—Distribution Under Section 661(a)(2)
The due date of the original Form 965-E is within 30
Enter the amount from Form 1041, Schedule B, line 10, for
! days of the triggering event. 2022. This is the amount properly paid, credited, or required
CAUTION
to be distributed other than the amount of income for the
The due date of the election to pay in installments is current tax year required to be distributed currently.
! the due date of the return for the tax year, including
CAUTION extensions. The actual payment of the first
Line 2—Distributable Net Income
installment is due no later than the due date of the return for
the tax year without extensions, even if the election is made Enter the amount from Form 1041, Schedule B, line 7, for
on a return filed by the extended due date. 2022. This is the amount of DNI for the current tax year
determined under section 643(a).
Question 12
Check the “Yes” box if the estate or trust entered into a Line 3—Distribution Under Section 661(a)(1)
transfer agreement as an eligible 965(i) transferee.
If, during the tax year, the estate or trust entered into a Enter the amount from Form 1041, Schedule B, line 9, for
transfer agreement as an eligible 965(i) transferee, the estate 2022. This is the amount of income for the current tax year
or trust must report the transfer in of that liability on Part IV of required to be distributed currently.
Form 965-A. See the Instructions for Form 965-A for
additional information. Line 5—Accumulation Distribution

Question 13 If line 11 of Form 1041, Schedule B, is more than line 8 of
If the deemed owner of a grantor portion of the ESBT is a Form 1041, Schedule B, complete the rest of Schedule J and
nonresident alien, the items of income, deduction, and credit file it with Form 1041, unless the trust has no previously
from that grantor portion must be reallocated to the S portion. accumulated income.
See Schedule G, Part I, line 4, Tax on the ESBT Portion of
the Trust, earlier, for how to figure the tax on the S portion of Generally, amounts accumulated before a beneficiary
the trust. reaches age 21 may be excluded by the beneficiary. See
sections 665 and 667(c) for exceptions relating to multiple
Question 14 trusts. The trustee reports to the IRS the total amount of the
The S portion of the ESBT must take into account the accumulation distribution before any reduction for income
qualified items of income, gain, deduction, and loss and other accumulated before the beneficiary reaches age 21. If the
items from any S corporation owned by the ESBT, and any multiple trust rules don't apply, the beneficiary claims the
qualified items of income, gain, deduction, and loss and other exclusion when filing Form 4970, as you may not be aware
items reallocated to the S portion. See Question 13, earlier. that the beneficiary may be a beneficiary of other trusts with
For purposes of determining whether the taxable income of other trustees.
an ESBT exceeds the threshold amount, the S portion and
the non-S portion of an ESBT are treated as a single trust. For examples of accumulation distributions that include
See Regulations section 1.199A-6(d)(3)(vi). payments from one trust to another trust, and amounts

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distributed for a dependent's support, see Regulations during that year, the trust received outside income; or (b) the
section 1.665(b)-1A(b). trustee didn't distribute all of the trust's income that was
required to be distributed currently for that year. In this case,
Part II—Ordinary Income Accumulation UNI for that year must not be more than the greater of the
Distribution outside income or income not distributed during that year.
Enter the applicable year at the top of each column for each
throwback year. The term “outside income” means amounts that are
included in the DNI of the trust for that year but that aren't
“income” of the trust as defined in Regulations section
Line 6—DNI for Earlier Years 1.643(b)-1. Some examples of outside income are (a)
income taxable to the trust under section 691, (b) unrealized
Enter the applicable amounts as follows: accounts receivable that were assigned to the trust, and (c)
distributions from another trust that include the DNI or UNI of
Throwback year(s) Amount from line
the other trust.
1969–1977 . . . . . . . . Form 1041, Schedule C, line 5
1978–1979 . . . . . . . . Form 1041, line 61
1980 . . . . . . . . . . . . Form 1041, line 60 Line 16—Tax-Exempt Interest Included on Line 13
1981–1982 . . . . . . . . Form 1041, line 58
1983–1996 . . . . . . . . Form 1041, Schedule B, line 9 For each throwback year, divide line 15 by line 6 and multiply
1997–2021 . . . . . . . . Form 1041, Schedule B, line 7 the result by the following:

Throwback year(s) Amount from line
For information about throwback years, see the 1969–1977 . . . . . . . . Form 1041, Schedule C, line 2(a)
instructions for line 13. For purposes of line 6, in figuring the 1978–1979 . . . . . . . . Form 1041, line 58(a)
DNI of the trust for a throwback year, subtract any estate tax 1980 . . . . . . . . . . . . Form 1041, line 57(a)
1981–1982 . . . . . . . . Form 1041, line 55(a)
deduction for IRD if the income is includible in figuring the 1983–2021 . . . . . . . . Form 1041, Schedule B, line 2
DNI of the trust for that year.

Line 7—Distributions Made During Earlier Years
Part III—Taxes Imposed on Undistributed Net
Enter the applicable amounts as follows: Income
For the regular tax computation, if there is a capital gain,
Throwback year(s) Amount from line complete lines 18 through 25 for each throwback year. If the
1969–1977 . . . . . . . . Form 1041, Schedule C, line 8 trustee elected the alternative tax on capital gains, complete
1978 . . . . . . . . . . . . Form 1041, line 64 lines 26 through 31 instead of lines 18 through 25 for each
1979 . . . . . . . . . . . . Form 1041, line 65 applicable year. If there is no capital gain for any year, or
1980 . . . . . . . . . . . . Form 1041, line 64
1981–1982 . . . . . . . . Form 1041, line 62 there is a capital loss for every year, enter on Part II, line 9,
1983–1996 . . . . . . . . Form 1041, Schedule B, line 13 the amount of the tax for each year identified in the
1997–2021 . . . . . . . . Form 1041, Schedule B, line 11 instruction for line 18 and don't complete Part III. If the trust
received an accumulation distribution from another trust, see
Regulations section 1.665(b)-1A.
Line 11—Prior Accumulation Distribution Thrown Note. The alternative tax on capital gains was repealed for
Back to Any Throwback Year tax years beginning after December 31, 1978. The maximum
rate on net capital gain for 1981, 1987, and 1991 through
Enter the amount of prior accumulation distributions thrown 2021 isn't an alternative tax for this purpose.
back to the throwback years. Don't enter distributions
excluded under section 663(a)(1) for gifts, bequests, etc. Line 18—Regular Tax

Line 13—Throwback Years Enter the applicable amounts as follows:

Allocate the amount on line 5 that is an accumulation Throwback year(s) Amount from line
distribution to the earliest applicable year first, but don't 1969–1976 . . . . . . . . . Form 1041, page 1, line 24
allocate more than the amount on line 12 for any throwback 1977 . . . . . . . . . . . . . Form 1041, page 1, line 26
1978–1979 . . . . . . . . . Form 1041, line 27
year. An accumulation distribution is thrown back first to the 1980–1984 . . . . . . . . . Form 1041, line 26c
earliest preceding tax year in which there is undistributed net 1985–1986 . . . . . . . . . Form 1041, line 25c
income (UNI). Then, it is thrown back beginning with the next 1987 . . . . . . . . . . . . . Form 1041, line 22c
earliest year to any remaining preceding tax years of the 1988–2021 . . . . . . . . . Form 1041, Schedule G, line 1a
trust. The portion of the accumulation distribution allocated to
the earliest preceding tax year is the amount of the UNI for
that year. The portion of the accumulation distribution
allocated to any remaining preceding tax year is the amount Line 19—Trust's Share of Net Short-Term Gain
by which the accumulation distribution is larger than the total
of the UNI for all earlier preceding tax years. For each throwback year, enter the smaller of the capital gain
from the two lines indicated. If there is a capital loss or a zero
A tax year of a trust during which the trust was a simple on either or both of the two lines indicated, enter zero on
trust for the entire year isn't a preceding tax year unless (a) line 19.

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Throwback year(s)                        Amount from line                       1980–1984  . . . . . . . . . .           Form 1041, line 25
                                                                                1985–1986  . . . . . . . . . .           Form 1041, line 24
1969–1970  . . . . . . . . . . . . .   Schedule D, line 10, column 2, or        1987 . . . . . . . . . . . . . .         Form 1041, line 21
                                       Schedule D, line 12, column 2            1988–1996  . . . . . . . . . .           Form 1041, line 22
1971–1978  . . . . . . . . . . . . .   Schedule D, line 14, column 2, or        1997 . . . . . . . . . . . . . .         Form 1041, line 23
                                       Schedule D, line 16, column 2            1998–2018  . . . . . . . . . .           Form 1041, line 22
1979 . . . . . . . . . . . . . . . . . Schedule D, line 18, column (b), or      2019–2021  . . . . . . . . . .           Form 1041, line 23
                                       Schedule D, line 20, column (b)
1980–1981  . . . . . . . . . . . . .   Schedule D, line 14, column (b), or
                                       Schedule D, line 16, column (b)
1982 . . . . . . . . . . . . . . . . . Schedule D, line 16, column (b), or
                                       Schedule D, line 18, column (b)     Line 26—Tax on Income Other Than Long-Term 
1983–1996  . . . . . . . . . . . . .   Schedule D, line 15, column (b), or Capital Gain
                                       Schedule D, line 17, column (b)
1997–2002  . . . . . . . . . . . . .   Schedule D, line 14, column (2), or
                                       Schedule D, line 16, column (2)     Enter the applicable amounts as follows:
2003 . . . . . . . . . . . . . . . . . Schedule D, line 14a, column (2), or
                                       Schedule D, line 16a, column (2)         Throwback year(s)                        Amount from line
2004–2012  . . . . . . . . . . . . .   Schedule D, line 13, column (2), or      1969 . . . . . . . . . . . . . .         Schedule D, line 20
                                       Schedule D, line 15, column (2)          1970 . . . . . . . . . . . . . .         Schedule D, line 19
2013–2021  . . . . . . . .             Schedule D, line 17, column (2), or      1971 . . . . . . . . . . . . . .         Schedule D, line 50
                                       Schedule D, line 19, column (2)          1972–1975  . . . . . . . . . .           Schedule D, line 48
                                                                                1976–1978  . . . . . . . . . .           Schedule D, line 27

Line 20—Trust's Share of Net Long-Term Gain
                                                                           Line 27—Trust's Share of Net Short-Term Gain
Enter the applicable amounts as follows:
Throwback year(s)                        Amount from line                  If there is a loss on any of the following lines, enter zero on 
1969–1970  . . . . . . . . . . . .     50% of Schedule D, line 13(e)       line 27 for the applicable throwback year. Otherwise, enter 
1971–1977  . . . . . . . . . . . .     50% of Schedule D, line 17(e)       the applicable amounts as follows:
1978 . . . . . . . . . . . . . . . .   Schedule D, line 17(e), or line
                                       31, whichever is applicable,             Throwback year(s)                        Amount from line
                                         less Form 1041, line 23                1969–1970  . . . . . . .             Schedule D, line 10, column 2
1979 . . . . . . . . . . . . . . . .   Schedule D, line 25 or line 27,          1971–1978  . . . . . . .             Schedule D, line 14, column 2
                                       whichever is applicable, less
                                         Form 1041, line 23
1980–1981  . . . . . . . . . . . .       Schedule D, line 21, less
                                         Schedule D, line 22
1982 . . . . . . . . . . . . . . . .     Schedule D, line 23, less         Line 28—Trust's Share of Taxable Income Less 
                                         Schedule D, line 24               Section 1202 Deduction
1983–1986  . . . . . . . . . . . .       Schedule D, line 22, less
                                         Schedule D, line 23
1987–1996  . . . . . . . . . . . .       Schedule D, the smaller           Enter the applicable amounts as follows:
                                         of any gain on line 16 
                                          or line 17, column (b)                Throwback year(s)                        Amount from line
1997–2001  . . . . . . . . . . . .       Schedule D, the smaller                1969 . . . . . . . . . . . . . . . .     Schedule D, line 19
                                         of any gain on line 15c or             1970 . . . . . . . . . . . . . . . .     Schedule D, line 18
                                         line 16, column (2)                    1971 . . . . . . . . . . . . . . . .     Schedule D, line 38
2002 . . . . . . . . . . . . . . . .     Schedule D, the smaller                1972–1975  . . . . . . . . . . . .       Schedule D, line 39
                                         of any gain on line 15a or             1976–1978  . . . . . . . . . . . .       Schedule D, line 21
                                         line 16, column (2)
2003 . . . . . . . . . . . . . . . .     Schedule D, the smaller
                                         of any gain on line 15a or
                                         line 16a, column (2)              Part IV—Allocation to Beneficiary
2004–2012  . . . . . . . . . . . .       Schedule D, the smaller           Complete Part IV for each beneficiary. If the accumulation 
                                         of any gain on line 14a           distribution is allocated to more than one beneficiary, attach 
                                          or line 15, column (2)           an additional copy of Schedule J with Part IV completed for 
2013–2021  . . . . . . . . . . . .       Schedule D, the smaller           each additional beneficiary. Give each beneficiary a copy of 
                                         of any gain on line 18a or        their respective Part IV information. If more than 5 throwback 
                                         line 19, column (2)
                                                                           years are involved, use another Schedule J, completing Parts 
                                                                           II and III for each additional throwback year.
                                                                                If the beneficiary is a nonresident alien individual or a 
Line 22—Taxable Income                                                     foreign corporation, see section 667(e) about retaining the 
Enter the applicable amounts as follows:                                   character of the amounts distributed to determine the amount 
                                                                           of the U.S. withholding tax.
Throwback year(s)                        Amount from line
1969–1976  . . . . . . . . . .          Form 1041, page 1, line 23              The beneficiary uses Form 4970 to figure the tax on the 
1977 . . . . . . . . . . . . . .        Form 1041, page 1, line 25         distribution. The beneficiary also uses Form 4970 for the 
1978–1979  . . . . . . . . . .           Form 1041, line 26                section 667(b)(6) tax adjustment if an accumulation 
                                                                           distribution is subject to estate or GST tax. This is because 
                                                                           the trustee can't be the estate or GST tax return filer.

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or 1040-SR or other prepared specific instructions for each
Schedule K-1 (Form item reported on the beneficiary's Schedule K-1.
1041)—Beneficiary's Share of
Inclusion of Amounts in Beneficiaries' Income
Income, Deductions, Credits, etc.
Simple trust. The beneficiary of a simple trust must include
General Instructions in their gross income the amount of the income required to be
distributed currently, whether or not distributed, or if the
Use Schedule K-1 (Form 1041) to report the beneficiary's income required to be distributed currently to all beneficiaries
share of income, deductions, and credits from a trust or a exceeds the DNI, their proportionate share of the DNI. The
decedent's estate. determination of whether trust income is required to be
Grantor type trusts don't use Schedule K-1 (Form distributed currently depends on the terms of the trust
instrument and applicable local law. See Regulations section
CAUTION the grantor (or other person treated as owner). See
! 1041) to report the income, deductions, or credits of 1.652(c)-4 for a comprehensive example.
Grantor Type Trusts, earlier. Estates and complex trusts. The beneficiary of a
decedent's estate or complex trust must include in their gross
Who Must File income the sum of:
1. The amount of the income required to be distributed
The fiduciary (or one of the joint fiduciaries) must file currently, or if the income required to be distributed currently
Schedule K-1. A copy of each beneficiary's Schedule K-1 is to all beneficiaries exceeds the DNI (figured without taking
attached to the Form 1041 filed with the IRS, and each into account the charitable deduction), their proportionate
beneficiary is given a copy of their respective Schedule K-1. share of the DNI (as so figured); and
One copy of each Schedule K-1 must be retained for the 2. All other amounts properly paid, credited, or required
fiduciary's records. to be distributed, or if the sum of the income required to be
distributed currently and other amounts properly paid,
Beneficiary's Identifying Number credited, or required to be distributed to all beneficiaries
exceeds the DNI, their proportionate share of the excess of
As a payer of income, you are required to request and DNI over the income required to be distributed currently.
provide a proper identifying number for each recipient of See Regulations section 1.662(c)-4 for a comprehensive
income. Enter the beneficiary's number on the respective example.
Schedule K-1 when you file Form 1041. Individuals and For complex trusts that have more than one beneficiary,
business recipients are responsible for giving you their TINs and if different beneficiaries have substantially separate and
upon request. You may use Form W-9 to request the independent shares, their shares are treated as separate
beneficiary's identifying number. trusts for the sole purpose of determining the amount of DNI
Penalty. You may be charged a $50 penalty for each failure allocable to the respective beneficiaries. A similar rule
to provide a required TIN, unless reasonable cause is applies to treat substantially separate and independent
established for not providing it. Explain any reasonable shares of different beneficiaries of an estate as separate
cause in a signed affidavit and attach it to this return. estates. For examples of the application of the separate
share rule, see the regulations under section 663(c).
Truncating recipient's identification number on benefi-
ciary's statement. The estate or trust can truncate a Gifts and bequests. Don't include in the beneficiary's
beneficiary’s identifying number on the Schedule K-1 the income any gifts or bequests of a specific sum of money or of
estate or trust sends to the beneficiary. Truncation isn't specific property under the terms of the governing instrument
allowed on the Schedule K-1 the estate or trust files with the that are paid or credited in three installments or less.
IRS. Also, the estate or trust can't truncate its own Amounts that can be paid or credited only from income of
identification number on any form. the estate or trust don't qualify as a gift or bequest of a
To truncate, where allowed, replace the first five digits of specific sum of money.
the nine-digit number with asterisks (*) or Xs (for example, an Past years. Don't include in the beneficiary's income any
SSN xxx-xx-xxxx would appear as ***-**-xxxx or amounts deducted on Form 1041 for an earlier year that were
XXX-XX-xxxx). For more information, see Regulations credited or required to be distributed in that earlier year.
section 301.6109-4.
Character of income. The beneficiary's income is
Substitute Forms considered to have the same proportion of each class of
items entering into the computation of DNI that the total of
each class has to the DNI (for example, half dividends and
You don't need IRS approval to use a substitute half interest if the income of the estate or trust is half
Schedule K-1 if it is an exact copy of the IRS schedule. The dividends and half interest).
boxes must use the same numbers and titles and must be in
Allocation of deductions. Generally, items of deduction
the same order and format as on the comparable IRS
that enter into the computation of DNI are allocated among
Schedule K-1. The substitute schedule must include the
the items of income to the extent such allocation isn't
OMB number and the six-digit form ID code in the upper
inconsistent with the rules set out in section 469 and its
right-hand corner of the schedule.
regulations, relating to passive activity loss limitations, in the
following order.
You must provide each beneficiary with the Instructions for
Schedule K-1 (Form 1041) for a Beneficiary Filing Form 1040

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First, all deductions directly attributable to a specific class         paper and should be identified in alphanumeric order by box 
of income are deducted from that income. For example,                   number followed by the letter code (if any). For example: 
rental expenses, to the extent allowable, are deducted from             “Box 9, Code A—Depreciation” (followed by the information 
rental income.                                                          the beneficiary needs).
Second, deductions that aren't directly attributable to a               Too few entry spaces on Schedule K-1?      If the estate or 
specific class of income may generally be allocated to any              trust has more coded items than the number of spaces in 
class of income, as long as a reasonable portion is allocated           box 9 or boxes 11 through 14, don't enter a code or dollar 
to any tax-exempt income. Deductions considered not                     amount in the last entry space of the box. In the last entry 
directly attributable to a specific class of income under this          space, enter an asterisk (*) in the left column and enter 
rule include fiduciary fees, and state income and personal              “STMT” in the entry space to the right. Report the additional 
property taxes. The charitable deduction, however, must be              items on an attached statement and provide the box number, 
ratably apportioned among each class of income included in              code, description, and dollar amount or information for each 
DNI.                                                                    additional item. For example: “Box 13, Code H—Biofuel 
Finally, any excess deductions that are directly                        Producer Credit, $500.00.”
attributable to a class of income may be allocated to another 
class of income. However, in no case can excess deductions              Specific Instructions
from a passive activity be allocated to income from a 
nonpassive activity, or to portfolio income earned by the               Part I. Information About the Estate or Trust
estate or trust. Excess deductions attributable to tax-exempt           On each Schedule K-1, enter the name, address, and 
income can't offset any other class of income.                          identifying number of the estate or trust. Also, enter the name 
In no case can deductions be allocated to an item of                    and address of the fiduciary.
income that isn't included in the computation of DNI, or 
attributable to corpus.                                                 Item D
You can't show any negative amounts for any class of 
income shown in boxes 1 through 8 of Schedule K-1.                      If the fiduciary of a trust or decedent's estate filed Form 
However, for the final year of the estate or trust, certain             1041-T, you must check this box and enter the date it was 
deductions or losses can be passed through to the                       filed.
beneficiary(ies). See the instructions for box 11 for more 
information on these deductions and losses. Also, the                   Item E
beneficiary's share of depreciation and depletion is 
apportioned separately. These deductions may be allocated               If this is the final year of the estate or trust, you must check 
to the beneficiary(ies) in amounts greater than their income.           this box.
See Depreciation, Depletion, and Amortization, earlier, and 
Rev. Rul. 74-530, 1974-2 C.B. 188.                                      Note. If this is the final K-1 for the beneficiary, check the 
                                                                        “Final K-1” box at the top of Schedule K-1.

Beneficiary's Tax Year                                                  Part II. Information About the Beneficiary
                                                                        Complete a Schedule K-1 for each beneficiary. On each 
The beneficiary's income from the estate or trust must be               Schedule K-1, enter the beneficiary's name, address, and 
included in the beneficiary's tax year during which the tax             identifying number.
year of the estate or trust ends. See Pub. 559 for more 
information, including the effect of the death of a beneficiary 
during the tax year of the estate or trust.                             Item H

General Reporting Information                                           Check the Foreign beneficiary box if the beneficiary is a 
If the return is for a fiscal year or a short tax year, fill in the tax nonresident alien individual, a foreign corporation, or a 
year space at the top of each Schedule K-1. On each                     foreign estate or trust. Otherwise, check the Domestic 
Schedule K-1, enter the information about the estate or trust           beneficiary box.
and the beneficiary in Parts I and II (items A through H). In 
Part III, enter the beneficiary's share of each item of income,         Part III. Beneficiary's Share of Current Year 
deduction, credit, and any other information the beneficiary            Income, Deductions, Credits, and Other Items
needs to file their income tax return.                                  Box 1—Interest
Codes. In box 9 and boxes 11 through 14, identify each item 
by entering a code in the column to the left of the entry space         Enter the beneficiary's share of the taxable interest income 
for the dollar amount. These codes are identified in these              minus allocable deductions.
instructions and on the back of the Schedule K-1.
Attached statements.    Enter an asterisk (*) after the code, if        Box 2a—Total Ordinary Dividends
any, in the column to the left of the dollar amount entry space 
for each item for which you have attached a statement                   Enter the beneficiary's share of ordinary dividends minus 
providing additional information. For those informational               allocable deductions.
items that can't be reported as a single dollar amount, enter 
the code and asterisk (*) in the left-hand column and enter             Box 2b—Total Qualified Dividends
“STMT” in the entry space to the right to indicate that the 
information is provided on an attached statement. More than             Enter the beneficiary's share of qualified dividends minus 
one attached statement can be placed on the same sheet of               allocable deductions.

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Box 3—Net Short-Term Capital Gain Any directly apportionable deduction, such as
depreciation, is treated by the beneficiary as having been
Enter the beneficiary's share of the net short-term capital incurred in the same activity as incurred by the estate or trust.
gain from Schedule D (Form 1041), line 17, column (1), However, the character of such deduction may be
minus allocable deductions. Don't enter a loss in box 3. If, for determined as if the beneficiary incurred the deduction
the final year of the estate or trust, there is a capital loss directly.
carryover, enter in box 11, code C, the beneficiary's share of
short-term capital loss carryover. However, if the beneficiary To assist the beneficiary in figuring any applicable passive
is a corporation, enter in box 11, code C, the beneficiary's activity loss limitations, also attach a separate schedule
share of all short- and long-term capital loss carryovers as a showing the beneficiary's share of directly apportionable
single item. See section 642(h) and related regulations for deductions derived from each trade or business, rental real
more information. estate, and other rental activity.

Enter the beneficiary's share of directly apportioned
Boxes 4a Through 4c—Net Long-Term Capital deductions using codes A through C.
Gain
Depreciation (code A). Enter the beneficiary's share of the
Enter the beneficiary's share of the net long-term capital gain depreciation deductions directly apportioned to each activity
from Schedule D (Form 1041), lines 18a through 18c, column reported in boxes 5 through 8. See Depreciation, Depletion,
(1), minus allocable deductions. and Amortization, earlier, for a discussion of how the
depreciation deduction is apportioned between the
Don't enter a loss in boxes 4a through 4c. If, for the final beneficiaries and the estate or trust. Report any AMT
year of the estate or trust, there is a capital loss carryover, adjustment or tax preference item attributable to depreciation
enter in box 11, code D, the beneficiary's share of the separately in box 12, using code G.
long-term capital loss carryover. (If the beneficiary is a
corporation, see the instructions for box 3.) See section Note. An estate or trust can't make an election under section
642(h) and related regulations for more information. 179 to expense certain depreciable business assets.
Depletion (code B). Enter the beneficiary's share of the
Gains or losses from the complete or partial disposition of depletion deduction under section 611 directly apportioned
a rental, rental real estate, or trade or business activity that is to each activity reported in boxes 5 through 8. See
a passive activity must be shown on an attachment to Depreciation, Depletion, and Amortization, earlier, for a
Schedule K-1. discussion of how the depletion deduction is apportioned
between the beneficiaries and the estate or trust. Report any
Box 5—Other Portfolio and Nonbusiness Income tax preference item attributable to depletion separately in
box 12, using code H.
Enter the beneficiary's share of annuities, royalties, or any Amortization (code C). Itemize the beneficiary's share of
other income, minus allocable deductions (other than directly the amortization deductions directly apportioned to each
apportionable deductions), that isn't subject to any passive activity reported in boxes 5 through 8. Apportion the
activity loss limitation rules at the beneficiary level. Use amortization deductions between the estate or trust and the
boxes 6 through 8 to report income items subject to the beneficiaries in the same way that the depreciation and
passive activity rules at the beneficiary's level. depletion deductions are divided. Report any AMT
adjustment attributable to amortization separately in box 12,
Boxes 6 Through 8—Ordinary Business Income, using code I.
Rental Real Estate, and Other Rental Income
Box 10—Estate Tax Deduction (Including Certain
Enter the beneficiary's share of trade or business, rental real
Generation-Skipping Transfer Taxes)
estate, and other rental income, minus allocable deductions
(other than directly apportionable deductions). To assist the If the distribution deduction consists of any IRD, and the
beneficiary in figuring any applicable passive activity loss estate or trust was allowed a deduction under section 691(c)
limitations, also attach a separate schedule showing the for the estate tax paid attributable to such income (see the
beneficiary's share of income derived from each trade or line 19 instructions), then the beneficiary is allowed an estate
business, rental real estate, and other rental activity. tax deduction in proportion to their share of the distribution
that consists of such income. For an example of the
Box 9—Directly Apportioned Deductions computation, see Regulations section 1.691(c)-2. Figure the
The limitations on passive activity losses and credits computation on a separate sheet and attach it to the return.
! under section 469 apply to estates and trusts.
CAUTION Estates and trusts that distribute income to Box 11, Code A—Excess Deductions on
beneficiaries are allowed to apportion depreciation, Termination—Section 67(e) Expenses
depletion, and amortization deductions to the beneficiaries.
These deductions are referred to as “directly apportionable If this is the final return of the estate or trust, and there are
deductions.” excess deductions on termination (see the instructions for
line 23), enter the beneficiary's share of excess deductions
Rules for treating a beneficiary's income and directly for section 67(e) expenses (amounts allowed in arriving at
apportionable deductions from an estate or trust and other AGI) in box 11, using code A. See Final Regulations -
rules for applying the passive loss and credit limitations to TD9918 for examples of allowable excess deductions on
beneficiaries of estates and trusts haven't yet been issued. termination of an estate or trust.

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Note. The beneficiary may deduct the excess deductions any unused NOL (and any alternative tax net operating loss)
shown in box 11, code A, as an adjustment to income on carryover for regular and AMT purposes if the carryover
Schedule 1 (Form 1040), Part II, line 24k. would be allowable to the estate or trust in a later tax year but
for the termination. Enter in box 11, using codes E and F, the
Excess deductions on termination occur only during the unused carryover amounts.
last tax year of the trust or decedent's estate when the total
deductions (excluding the charitable deduction and Box 12—AMT Items
exemption) are greater than the gross income during that tax
year. Adjustment for minimum tax purposes (code A). Enter
the beneficiary's share of the adjustment for minimum tax
Generally, a deduction based on an NOL carryover isn't purposes.
available to a beneficiary as an excess deduction. However,
if the last tax year of the estate or trust is also the last year in To figure the adjustment, subtract the beneficiary's share
which an NOL carryover may be taken (see section 172(b)), of the income distribution deduction figured on Schedule B,
the NOL carryover is considered an excess deduction on the line 15, from the beneficiary's share of the income distribution
termination of the estate or trust to the extent it isn't absorbed deduction on a minimum tax basis figured on Schedule I
by the estate or trust during its final tax year. For more (Form 1041), line 42. The difference is the beneficiary's share
information, see Regulations section 1.642(h)-4 for a of the adjustment for minimum tax purposes.
discussion of the allocation of the carryover among the Note. Schedule B, line 15, equals the sum of boxes 1, 2a, 3,
beneficiaries. 4a, 5, 6, 7, and 8 of all Schedules K-1.
Only the beneficiary of an estate or trust that succeeds to AMT adjustment attributable to qualified dividends, net
its property is allowed to deduct that entity's excess short-term capital gains, or net long-term capital gains
deductions on termination. A beneficiary who doesn't have (codes B through D). If any part of the amount reported in
enough income in that year to absorb the entire deduction box 12, code A, is attributable to qualified dividends (code
can't carry the balance over to any succeeding year. B), net short-term capital gain (code C), or net long-term
capital gain (code D), enter that part using the applicable
Box 11, Code B—Excess Deductions on code.
Termination—Non-Miscellaneous Itemized AMT adjustment attributable to unrecaptured section
Deductions 1250 gain or 28% rate gain (codes E and F). Enter the
beneficiary's distributive share of any AMT adjustments to
If this is the final return of the estate or trust, and there are the unrecaptured section 1250 gain (code E) or 28% rate
excess deductions on termination (see the instructions for gain (code F), whichever is applicable, in box 12.
line 23), enter the beneficiary's share of excess deductions Accelerated depreciation, depletion, and amortization
for non-miscellaneous itemized deductions in box 11, using (codes G through I). Enter any adjustments or tax
code B. Figure the deductions on a separate sheet and preference items attributable to depreciation (code G),
attach it to the return. depletion (code H), or amortization (code I) that were directly
apportioned to the beneficiary. For property placed in service
An individual beneficiary must be able to itemize before 1987, report separately the accelerated depreciation
deductions in order to claim excess deductions that are of real and leased personal property.
non-miscellaneous itemized deductions in determining
taxable income. Exclusion items (code J). Enter the beneficiary's share of
the adjustment for minimum tax purposes from box 12, code
Note. Section 67(g) suspends miscellaneous itemized A, of Schedule K-1, that is attributable to exclusion items
deductions subject to the 2% floor for tax years 2018 through (Schedule I (Form 1041), lines 2, 3, 4, 5, and 7).
2025. Therefore, miscellaneous itemized deductions are not
deductible as excess deductions on termination of an estate Box 13—Credits and Credit Recapture
or trust. Consult your state taxing authority for information
about deducting miscellaneous itemized deductions on your Enter each beneficiary's share of the credits and credit
state tax return. recapture using the applicable codes. Listed below are the
credits that can be allocated to the beneficiary(ies). Attach a
Box 11, Codes C and D—Unused Capital Loss statement if additional information must be provided to the
Carryover beneficiary as explained below.
Upon termination of the trust or decedent's estate, the • Credit for estimated taxes (code A). Payment of estimated
beneficiary succeeding to the property is allowed as a tax to be credited to the beneficiary (section 643(g)).
deduction any unused capital loss carryover under section See the instructions for Schedule G, Part II, line 11,
1212. If the estate or trust incurs capital losses in the final ! before you make an entry to allocate any estimated
year, use the Capital Loss Carryover Worksheet in the CAUTION tax payments to a beneficiary. If the fiduciary doesn't
Instructions for Schedule D (Form 1041) to figure the amount make a valid election, then the IRS will disallow the estimated
of capital loss carryover to be allocated to the beneficiary. tax payment that is reported on Schedule K-1 and claimed on
the beneficiary's return.
Box 11, Codes E and F—NOL Carryover • Credit for backup withholding (code B).
Upon termination of a trust or decedent's estate, a
beneficiary succeeding to its property is allowed to deduct

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Income tax withheld on wages can't be distributed to Foreign taxes (code B). Enter the beneficiary's allocable
! the beneficiary. share of taxes paid or accrued to a foreign country. Attach a
CAUTION
statement reporting the beneficiary's share of foreign tax
• The low-income housing credit (code C). Attach a (paid or accrued) and income by category including interest,
statement that shows the beneficiary's share of the amount, if dividends, rents and royalties, and other income. See Form
any, entered on line 6 of Form 8586, Low-Income Housing 1116 and Pub. 514 for more information.
Credit, with instructions to report that amount on Form 8586,
line 4, or Form 3800, Part III, line 4d, if the beneficiary's only Foreign trading gross receipts (code G). Enter the
source for the credit is a pass-through entity. beneficiary's share, if any, of foreign trading gross receipts.
• Rehabilitation credit and energy credit (code D). Attach a See Form 8873 for more information.
statement that shows the beneficiary's apportioned share of NIIT (code H). Use code H to identify the amount of the
basis, expenditures, and other information that is necessary beneficiary's adjustment for section 1411 NII or deductions.
for the beneficiary to complete Form 3468, Investment See the Instructions for Form 8960. An attachment may be
Credit, for the rehabilitation credit and the energy credit. See provided with the Schedule K-1 informing the beneficiary of
the Instructions for Form 3468 for more information. the detailed items to be reported on Form 1040 or 1040-SR.
• Other qualifying investment credit (code E). Attach a See Net Investment Income Tax (NIIT), earlier, for more
statement that shows the beneficiary's apportioned share of information on these amounts.
qualified investment and other information that is necessary
for the beneficiary to complete Form 3468 for the qualifying Section 199A information (code I). In the case of a trust
advanced coal project credit, qualifying gasification project or estate, the QBI deduction, also known as the section 199A
credit, and qualifying advanced energy project credit. See deduction, is determined at the beneficiary level for the
the Instructions for Form 3468 for more information. portions of QBI, qualified REIT dividends, and qualified PTP
• Work opportunity credit (code F). items apportioned to the beneficiaries. To allow beneficiaries
• Credit for small employer health insurance premiums to correctly figure their QBI deduction, the trust or estate
(code G). must enter an asterisk (*) on each beneficiary’s Schedule K-1
• Biofuel producer credit (code H). next to code I and enter “STMT” in the right column to
• Credit for increasing research activities (code I). indicate that the information is provided on an attached
• Renewable electricity production credit (code J). Attach a statement. Do not add amounts into a single number and
statement that shows separately the amount of the credit the report it on Schedule K-1. The information must be
beneficiary must report on line 19 of Form 8835, including the separately identified for each trade or business the trust or
allocation of the credit for production during the 4-year period estate directly conducts, including specified service trades or
beginning on the date the facility was placed in service and businesses (SSTBs). The trust or estate must attach the
for production after that period. statement to each Schedule K-1, separately identifying the
• Empowerment zone employment credit (code K). beneficiary’s allocable share of:
• Indian employment credit (code L). 1. Qualified items of income, gain, deduction, and loss;
• Orphan drug credit (code M). 2. W-2 wages;
• Credit for employer provided childcare and facilities (code
3. UBIA of qualified property;
N).
• Biodiesel, renewable diesel, or sustainable aviation fuels 4. Qualified PTP items; and
credit (code O). If the credit includes the small agri-biodiesel 5. Section 199A dividends, also known as qualified REIT
credit, attach a statement that shows the beneficiary's share dividends.
of the small agri-biodiesel credit, the number of gallons
claimed for the small agri-biodiesel credit, and the estate's or The trust or estate must make an initial determination of
trust's productive capacity for agri-biodiesel. which items are qualified items of income, gain, deduction,
• Credit to holders of tax credit bonds (code P). and loss at its level and report to each beneficiary their share
• Credit for employer differential wage payments (code Q). of all items that may be qualified items at the beneficiary
• Recapture of credits (code R). On an attached statement level. See Determining the trust’s or estate’s QBI or qualified
to Schedule K-1, provide any information the beneficiary will PTP items, later. The beneficiary must then determine
need to report recapture of credits. whether each item is includible in QBI.
• Other credits (code Z). This code is used to report the In addition, the trust or estate must also report on whether
beneficiary's share of all other credits, such as the following. any of its trades or businesses are SSTBs and identify on the
° Employee retention credit. See Form 5884-A and its statement any trades or businesses that are aggregated.
instructions for more information about the employee Trusts and estates should use Statement A—QBI
retention credit. Pass-Through Entity Reporting, in these instructions, or a
° Advanced manufacturing production credit. Section substantially similar statement, to report each beneficiary’s
13502 of the Inflation Reduction Act of 2022 (IRA 22) allocable information from each trade or business, including
created the advanced manufacturing production credit for QBI items, W-2 wages, UBIA of qualified property, qualified
certain components produced and sold after 2022. This PTP items, and section 199A dividends by attaching the
may be applicable to fiscal year filers. See Form 7207 completed statement(s) to each beneficiary’s Schedule K-1.
and its instructions and section 45X. The trust or estate should also use Statement A—QBI
Pass-Through Entity Reporting to report each beneficiary’s
Box 14—Other Information share of QBI items, W-2 wages, UBIA of qualified property,
qualified PTP items, and section 199A dividends reported to
Enter the dollar amounts and applicable codes for the items the trust or estate by another entity.
listed under Other Information.

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Note. The estate or trust must report each beneficiary's or business where the principal asset is the reputation or skill
share of qualified items of income, gain, deduction, and loss of one or more of its employees or owners” means any trade
from a PTP. The PTP component is not limited by the W-2 or business that consists of any of the following: (i) a trade or
wages and UBIA of qualified property limitations. Therefore, business in which a person receives fees, compensation, or
neither the PTP nor its owners (including estates and trusts) other income for endorsing products or services; (ii) a trade
are required to report W-2 wages or UBIA of qualified or business in which a person licenses or receives fees,
property amounts related to a trade or business operated by compensation, or other income for the use of an individual’s
a PTP. image, likeness, name, signature, voice, trademark, or any
Trusts and estates should use Statement B—QBI other symbols associated with the individual’s identity; or (iii)
Pass-Through Entity Aggregation Election(s), in these receiving fees, compensation, or other income for appearing
instructions, or a substantially similar statement, to report at an event or on radio, television, or another media format.
aggregated trades or businesses and provide supporting Exception. If the beneficiary’s taxable income is equal to
information to beneficiaries on each Schedule K-1. or less than the threshold for the reporting 2022 tax year,
$170,050 ($340,100 if married filing jointly), the QBI from the
Trusts and estates should use Statement C—QBI
SSTB may be used by the beneficiary to compute their QBI
Pass-Through Entity Reporting—Patrons of Specified
deduction. If the beneficiary’s taxable income is within the
Agricultural and Horticultural Cooperatives, in these
phase-in range, the threshold amount plus $50,000
instructions, or a substantially similar statement, to report
($100,000 if married filing jointly), an applicable percentage
allocable QBI and W-2 wages allocable to qualified
of the QBI, W-2 wages, and UBIA of qualified property from
payments from a specified agricultural or horticultural
an SSTB may be used by the beneficiary to compute their
cooperative for each trade or business. This statement
QBI deduction. Therefore, the statement attached to the
should also be used to report each beneficiary’s allocable
Schedule K-1 issued to each beneficiary must identify any
section 199A(g) deduction reported to the trust or estate by
the specified cooperative. items relating to SSTBs.
Aggregation. A trust or estate engaged in more than one
Determining the trust’s or estate’s qualified trades or
trade or business may choose to aggregate multiple trades or
businesses. The trust’s or estate’s qualified trades or
businesses into a single trade or business for purposes of
businesses include its section 162 trades or businesses,
section 199A if it meets the following requirements.
except for SSTBs, or the trade or business of providing
services as an employee. A section 162 trade or business 1. The same person, or group of persons, either directly
generally includes any activity carried on to make a profit and or through attribution, owns 50% or more of each trade or
with considerable, regular, and continuous activity. For more business for a majority of the tax year, including the last day
information on what qualifies as a trade or business for of the tax year, and all trades or businesses use the same tax
purposes of section 199A, see the instructions for Form 8995 year-end.
or Form 8995-A. 2. None of the trades or businesses are an SSTB.
Rental real estate. Rental real estate may constitute a 3. The trades or businesses to be aggregated meet at
trade or business for purposes of the QBI deduction if the least two of the following three factors.
rental real estate:
• Rises to the level of a trade or business under section 162; a. They provide products, property, or services that are
• Satisfies the requirements for the rental real estate safe the same or that are customarily offered together.
harbor in Rev. Proc. 2019-38, 2019-42 I.R.B. 942; or b. They share facilities or share significant centralized
• Meets the self-rental exception (that is, the rental or business elements, such as personnel, accounting, legal,
licensing of property to a commonly controlled trade or manufacturing, purchasing, human resources, or information
business conducted by an individual or relevant technology resources.
pass-through entity (RPE)) in Regulations section c. They are operated in coordination with, or reliance
1.199A-1(b)(14). upon, one or more of the businesses in the aggregated
group.
The determination of whether rental real estate constitutes a
trade or business for purposes of the QBI deduction is made If the trust or estate chooses to aggregate multiple trades
by the trust or estate. The trust or estate must first make this or businesses, it must report the aggregation on Statement
determination and then only include the allocable share of B, or a substantially similar statement, and attach it to each
rental real estate items of income, gain, loss, and deduction Schedule K-1. The statement must provide the information
on the statement provided to beneficiaries. Rental real estate necessary to identify each separate trade or business
that does not meet one of the three conditions noted above included in each aggregation, a description of the
does not constitute a trade or business for purposes of the aggregated trades or businesses, and an explanation of the
QBI deduction and must not be included in the QBI factors met that allow the aggregation in accordance with
information provided to beneficiaries. Regulations section 1.199A-4. The aggregation statement
SSTBs excluded from qualified trades or businesses. must be completed each year to show the trust’s or estate's
SSTBs are generally excluded from the definition of a trade or business aggregations. Failure to disclose the
qualified trade or business. An SSTB is any trade or business aggregations may cause them to be disaggregated.
providing services in the field of health, law, accounting, The trust’s or estate's aggregations must be reported
actuarial science, performing arts, consulting, athletics, consistently for all subsequent years, unless there is a
financial services, brokerage services, investing and change in facts and circumstances that changes or
investment management, trading or dealing in securities, disqualifies the aggregation. The trust or estate must provide
trust or estate interests, or commodities or any other trade or a written explanation for any changes to prior year
business where the principal asset is the reputation or skill of aggregations that describes the change in facts and
one or more of its employees or owners. The term “any trade circumstances.

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If the trust or estate directly or indirectly owns an interest partnership interest that is not treated as a capital gain or
in an RPE that aggregates multiple trades or businesses, it loss.
must attach a copy of the RPE’s aggregation to each However, QBI and qualified PTP items don’t include any
Schedule K-1. The trust or estate cannot break apart the of the following.
aggregation of another RPE, but it may add trades or • Items that are treated as capital gain or loss under any
businesses to the aggregation, assuming the requirements provision of the Code.
above are satisfied. • Dividends or dividend equivalents, including qualified REIT
Determining the trust’s or estate’s QBI or qualified dividends.
PTP items. The trust’s or estate’s items of QBI that must be • Interest income (unless received in connection with the
reported to beneficiaries include the allocated amounts of trade or business).
qualified items of income, gain, deduction, and loss from the • Wage income.
trust’s or estate’s trades or businesses that are effectively • Income that is not effectively connected with the conduct
connected with the conduct of a trade or business within the of a trade or business within the United States (for more
United States. This may include, but is not limited to, items information, go to IRS.gov and type in the key word
such as ordinary business income or (losses), section 1231 “effectively connected income”).
gains or (losses), section 179 deductions, and interest from • Commodities transactions, or foreign currency gains or
debt-financed distributions. losses described in section 954(c)(1)(C) or (D).
QBI may also include rental income (losses) or royalty • Income, loss, or deductions from notional principal
income, if the activity rises to the level of a trade or business; contracts under section 954(c)(1)(F).
and gambling gains or (losses), but only if the trust or estate • Annuities (unless received in connection with the trade or
is engaged in the trade or business of gambling. Whether an business).
activity rises to the level of a trade or business must be • Guaranteed payments described in section 707(c)
determined at the entity level and, once made, is binding on received by the entity for services rendered to a partnership.
beneficiaries. • Payments described in section 707(a) received by the
Qualified PTP items that must be reported to the entity for services rendered to a partnership.
beneficiaries include the allocated amounts of the trust’s or QBI Flowchart. Trusts or estates may use the QBI
estate’s share of qualified items of income, gain, deduction, Flowchart to help them determine if an allocated item of
and loss from a PTP and may also include gain or loss income, gain, deduction, or loss is includible in QBI
recognized on the disposition of the trust’s or estate’s reportable to beneficiaries.

QBI Flowchart

Questions Yes No
Is the item effectively connected with the conduct of a trade or business within the United Continue Stop, this item isn’t QBI.
States?
Is the item attributable to a trade or business (this may include section 1231 gain (loss), Continue Stop, this item isn’t QBI.
section 179 deductions, interest from debt-financed distributions, etc.)? Examples of an item
not considered attributable to the trade or business at the entity level include gambling
income (loss) where the entity isn’t engaged in the trade or business of gambling, income
(loss) from vacation properties when the entity isn’t in that trade or business, activities not
engaged in for profit, etc.
Is the item treated as a capital gain or loss under any provision of the Internal Revenue Code Stop, this item isn’t QBI. Continue
or is it a dividend or dividend equivalent?
Is the item interest income other than interest income properly allocable to a trade or Stop, this item isn’t QBI. Continue
business? (Note that interest income attributable to an investment of working capital,
reserves, or similar accounts isn’t properly allocable to a trade or business.)
Is the item an annuity, other than an annuity received in connection with the trade or business? Stop, this item isn’t QBI. Continue
Is the item gain or loss from a commodities transaction or foreign currency gain or loss Stop, this item isn’t QBI. Continue
described in section 954(c)(1)(C) or (D)?
Is the item gain or loss from a notional principal contract under section 954(c)(1)(F)? Stop, this item isn’t QBI. Continue
Is the item of income or loss from a qualified publicly traded partnership? This item is a qualified PTP This item is QBI. Report this
item. Report this item as item as QBI subject to
qualified PTP income or beneficiary-specific
loss, subject to determinations.
beneficiary-specific
determinations, and
check the PTP box.

Specific Instructions for Statement A—QBI determine whether it has qualified PTP items from an interest
Pass-Through Entity Reporting. in a PTP. The trust or estate must indicate the status on the
QBI or qualified PTP items. The trust or estate must first appropriate checkboxes for each trade or business (or
determine if it is engaged in one or more trades or aggregated trade or business) or PTP interest reported.
businesses. It must then determine if any of its trades or Note. SSTBs and PTPs cannot be aggregated with any
businesses are SSTBs. The trust or estate must also
other trade or business. So, if the aggregation box is

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checked, the SSTB and PTP boxes for that specific during the tax year and held on the last day of the tax year.
aggregated trade or business should not be checked. The depreciable period ends on the later of 10 years after the
Next, the trust or estate must report to each beneficiary property is placed in service or the last day of the full year for
their allocable share of all apportioned items that are QBI or the applicable recovery period under section 168.
qualified PTP items for each trade or business the trust or Section 199A dividends. The trust or estate must report
estate owns directly or indirectly. Use the QBI Flowchart to the apportioned allocable share of any REIT dividends to
determine if an allocated item is reportable as a QBI item or each beneficiary on Statement A, or a substantially similar
qualified PTP item subject to beneficiary-specific statement, attached to Schedule K-1. Section 199A
determinations. Each item included under “Other” must be dividends do not have to be reported by trade or business
stated separately, identifying the nature and amount of each and can be reported as a single amount to beneficiaries.
item. Section 199A dividends include dividends the trust or estate
W-2 wages and UBIA of qualified property. The trust or receives from a REIT held for more than 45 days, for which
estate must determine the W-2 wages and UBIA of qualified the payment is not obligated to someone else, is not a capital
property properly allocable to QBI for each qualified trade or gain dividend under section 857(b)(3), and is not a qualified
business and report the allocable share to each beneficiary dividend under section 1(h)(11), plus any apportioned
on Statement A, or a substantially similar statement, attached qualified REIT dividends received from a RIC.
to Schedule K-1. This includes the allocable share of W-2 Fiscal year trusts and estates. For purposes of
wages and UBIA of qualified property reported to the trust or determining the QBI or qualified PTP items, UBIA of qualified
estate from any qualified trades or businesses of an RPE the property, and the aggregate amount of qualified section 199A
trust or estate owns directly or indirectly. However, trusts or dividends, fiscal year trusts or estates include all items from
estates that own a direct or indirect interest in a PTP may not the fiscal tax year.
include any amounts for W-2 wages or UBIA of qualified For purposes of determining W-2 wages, fiscal year trusts
property from the PTP, as the W-2 wages and UBIA of or estates include apportioned amounts paid to employees
qualified property from a PTP are not allowed in computing under sections 6051(a)(3) and (8) for the calendar year
the W-2 wage and UBIA limitations. ended with or within the trust’s or estate’s tax year. If the trust
The W-2 wages are amounts paid to employees or estate conducts more than one trade or business, it must
described in sections 6051(a)(3) and (8). If the trust or estate allocate W-2 wages among its trades or businesses. See
conducts more than one trade or business, it must allocate Rev. Proc. 2019-11 for more information.
the W-2 wages among its trades or businesses. See Rev.
Proc. 2019-11, 2019-09 I.R.B. 742, for more information. Note. The trust or estate must report each beneficiary’s
share of qualified items of income, gain, deduction, and loss
The unadjusted basis of qualified property is figured by from a PTP, but the W-2 wages and UBIA of qualified
adding the unadjusted basis of all qualified assets property from the PTP should not be reported, as the
immediately after acquisition. Qualified property includes all beneficiary cannot use that information in computing their
tangible property subject to depreciation under section 167 QBI deduction.
for which the depreciable period hasn't ended that is held
and used for the production of QBI by the trade or business

Statement A—QBI Pass-Through Entity Reporting

Pass-through entity’s name: Pass-through entity’s EIN:
Beneficiary’s name: Beneficiary’s identifying number:
PTP PTP PTP
Beneficiary's Share of: Aggregated Aggregated Aggregated
SSTB SSTB SSTB
QBI or Qualified PTP Items Subject to Beneficiary-Specific Determinations TB1 TB2 TB3
Ordinary business income
Rental income
Other

W-2 Wages
UBIA of Qualified Property

Section 199A Dividends

Specific Instructions for Statement B—QBI or estate elects to aggregate more than one trade or
Pass-Through Entity Aggregation Election(s). If the trust business that meet all the requirements to aggregate, the

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trust or estate must report the aggregation to beneficiaries on subsequent years, unless there is a change in facts and
Statement B, or a substantially similar statement, and attach circumstances that changes or disqualifies the aggregation.
it to each Schedule K-1. The trust or estate must indicate The trust or estate must provide a written explanation for any
trades or businesses that were aggregated by checking the changes to prior year aggregations that describes the
appropriate box for each aggregated trade or business. The change in facts and circumstances.
trust or estate must also provide a description of the If the trust or estate holds a direct or indirect interest in an
aggregated trade or business and an explanation of the RPE that aggregates multiple trades or businesses, the trust
factors met that allow the aggregation. or estate must also include a copy of the RPE’s aggregations
The aggregation statement must be completed each year with each beneficiary’s Schedule K-1. The trust or estate
to show the trust’s or estate’s trade or business cannot break apart the aggregation of another RPE, but it
aggregations. Failure to disclose the aggregations may may add trades or businesses to the aggregation, assuming
cause them to be disaggregated. The trust’s or estate’s the aggregation requirements are satisfied.
aggregations must be reported consistently for all

Statement B—QBI Pass-Through Entity Aggregation Election(s)

Pass-through entity’s name: Pass-through entity’s EIN:
Aggregation of Pass-Through Business Operations
Aggregation 1
Provide a description of the aggregated trades or businesses and an explanation of the factors met that allow the aggregation in accordance with
Regulations section 1.199A-4. In addition, if the pass-through entity holds a direct or indirect interest in a relevant pass-through entity (RPE) that
aggregates multiple trades or businesses, attach a copy of the RPE's aggregations.

Has this trade or business aggregation changed from the prior year? This includes changes in the aggregation due to a trade or business being
formed, acquired, disposed, or ceasing operations. If yes, explain.

Note. If you have more than one aggregated group, attach additional Statements B. Name the additional aggregations 2, 3, 4, and so forth.

Specific Instructions for Statement C—QBI QBI items and W-2 wages allocable to qualified payments
Pass-Through Entity Reporting—Patrons of Specified include apportioned QBI items included on Statement A that
Agricultural and Horticultural Cooperatives. are allocable to the qualified payments reported to the trust
QBI items and wages allocable to qualified payments. or estate on Form 1099-PATR from the cooperative.
If the trust or estate is a patron of a specified agricultural or Section 199A(g) deduction. The trust or estate must
horticultural cooperative, the trust or estate must provide the report to its beneficiaries their allocable shares of any
allocable share of QBI items and W-2 wages allocable to apportioned section 199A(g) deduction passed through the
qualified payments from each trade or business to each of its cooperative, as reported on Form 1099-PATR. Section
beneficiaries on Statement C, or a substantially similar 199A(g) deductions do not have to be reported by trade or
statement, and attach it to Schedule K-1 so each beneficiary business and can be reported as a single amount to
can compute their patron reduction under section 199A(b)(7). beneficiaries.

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Statement C—QBI Pass-Through Entity Reporting—Patrons of Specified Agricultural and Horticultural
Cooperatives

Pass-through entity’s name: Pass-through entity’s EIN:
Beneficiary’s name: Beneficiary's identifying number:
PTP PTP PTP
Beneficiary’s Share of: Aggregated Aggregated Aggregated
SSTB SSTB SSTB
QBI Items Allocable to Qualified Payments Subject to Beneficiary-Specific TB1 TB2 TB3
Determinations
Ordinary business income
Rental income
Other

W-2 Wages Allocable to Qualified Payments

Section 199A(g) Deduction

Other information (code Z). List on a separate sheet the necessary to figure the GILTI inclusion to each beneficiary.
tax information the beneficiary will need to complete their See the Instructions for Form 8992 for details.
return that isn't entered elsewhere on Schedule K-1. Foreign-derived intangible income (FDII). Public Law
115-97 enacted section 250, which allows a domestic
For example, if the estate or trust participates in a
corporation a deduction for the eligible percentage of FDII
transaction that must be disclosed on Form 8886 (see
and GILTI. Section 250 is effective for tax years beginning
earlier), both the estate or trust and its beneficiaries may be
after 2017. If applicable, provide the necessary information to
required to file Form 8886. The estate or trust must
each domestic corporate beneficiary for its calculation of FDII
determine if any of its beneficiaries are required to disclose
benefit. See section 250 for more information. See the
the transaction and provide those beneficiaries with
Instructions for Form 8993 for details.
information they will need to file Form 8886. This
determination is based on the category(ies) under which a Limitation on business interest expense. If an estate or
transaction qualified for disclosure. See the Instructions for trust is required to file Form 8990, the adjusted taxable
Form 8886 for details. income of an estate or trust beneficiary is reduced by any
In addition, if the beneficiary is a “covered person” in income (including any DNI) received from the estate or trust
connection with a foreign tax credit splitter arrangement by the beneficiary to the extent such income supported a
under section 909, attach a statement that identifies the deduction for business interest expense under section 163(j)
arrangement including the foreign taxes paid or accrued. (1)(B) in computing the estate's or trust's taxable income. If
applicable, provide the beneficiary the necessary information
Inclusion of global intangible low-taxed income (GILTI). to calculate this amount in an attachment to Schedule K-1.
Section 951A requires U.S. shareholders of controlled See Form 8990 and the Instructions for Form 8990 for
foreign corporations to report their ratable share of GILTI in additional information.
taxable income. If applicable, provide the information

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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. Generally, tax returns and return
information are confidential, as required by Code section 6103.
The time needed to complete and file this form and related schedules will vary depending on individual circumstances. The
estimated average times are:

Form 1041 Schedule D Schedule I Schedule J Schedule K-1 Form 1041-V
Recordkeeping 25 hr., 35 min. 14 hr., 35 min. 17 hr., 42 min. 11 hr., 00 min. 6 hr., 27 min. 43 min.
Learning about the law
or the form 15 hr., 52 min. 3 hr., 38 min. 4 hr., 22 min. 1 hr., 27 min. 35 min. - - - -
Preparing the form 30 hr., 1 min. 4 hr., 58 min. 4 hr., 51 min. 2 hr., 37 min. 43 min. - - - -
Copying, assembling, and sending
the form to the IRS 3 hr., 45 min. 16 min. - - - - 16 min. - - - - - - - -

Comments and suggestions. If you have comments concerning the accuracy of these time estimates or suggestions for
making this form and related schedules simpler, we would be happy to hear from you. You can send us comments through
IRS.gov/FormComments. Or, you can write to the Internal Revenue Service, Tax Forms and Publications, 1111 Constitution
Ave. NW, IR-6526, Washington, DC 20224. Although we can't respond individually to each comment received, we do
appreciate your feedback and will consider your comments and suggestions as we revise our tax forms, instructions, and
publications. Don't send Form 1041 to this address. Instead, see Where To File, earlier.

Instructions for Form 1041 (2022) -51-

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Index
 
                                                Estate 5 41, 
A                                                 Bankruptcy  7 19,                               Q
Accounting income     3                           Exemption for      27                           Qualified business income deduction  27
Adjusted gross income (AGI)   2 4 10 15,  , , ,   Foreign   5                                     Qualified disability trust 27
  17 28 36 43, , ,                                Who must file      5                            Qualified revocable trust  5
Alaska Native Settlement Trusts   7             Estate tax deduction    27                        Qualified settlement funds   8
Amended return     20                           Estimated tax  10 28,                             Qualified small business stock  30
Amounts paid or permanently set                   Allocation of payments to beneficiaries      10 Qualified subchapter S trust (QSST)  5 14, , 
  aside   29                                      Penalty  28                                      19
Assembly   13                                   Exemption   27
Attachments   13                                Extraterritorial income exclusion     21          R
B                                               F                                                 Returns:
                                                                                                   Amended     20
Bankruptcy estate  7 16 19, ,                   Fiduciary  4 5 9,  ,                               Common trust fund     7
Bankruptcy information   16                     Fiduciary accounting income (FAI)                  Electronic and magnetic media  8
Beneficiary  4                                    (See Accounting income)                          Final  20
  Allocation of estimated tax payment 10        Final return 20                                    Nonexempt charitable trust   19 20, 
  Complex trust    41                           First-tier distributions  30                       Qualified settlement funds  8
  Estate  41                                    Foreign tax credit     32                          Split-interest trust 20
  Simple trust 41                               Form 1041-T   10                                   When to file  8
  Tax year for inclusion 42                     Form 8855   5                                      Who must file  5
  Withholding on foreign person 30                                                                Revocable Living Trusts:
Blind trust 21                                  G                                                  Section 645 Election   20
                                                General business credit     32
C                                               Grantor trusts   3 5 13 19,  , ,                  S
Cemetery perpetual care fund    27                Backup withholding      15                      Second-tier distributions   31
Charitable deduction  28                          Nonqualified deferred compensation              Separate share rule   29
Charitable remainder trusts   20                     plans  19
Common trust fund     7                           Optional filing methods    14                   Special filing instructions:
                                                  Pre-need funeral trusts   19                     Bankruptcy estates    18
                                                  Special filing instructions    13                Electing small business trusts 15
D                                               GST tax deduction      27                          Grantor trusts 13
Decedent's Estate  4                                                                               Pooled income funds    15
Definitions:                                    I                                                 Split-interest trust 20
  Accumulation distribution  38                                                                   Substitute forms   41
  Adjusted gross income (AGI)   4               Income distribution deduction       3 27 29, , 
  Beneficiary  4                                Inter vivos 3 4,                                  T
  Complex trust    18                           Interest income      21
  Decedent's estate   18                        IRD:                                              Tax rate schedule    31
  Decedent's Estate   4                           Deduction   27                                  Taxable income     28
                                                                                                  Throwback years    39
  DNI 4                                                                                           Trusts 4
  Fiduciary  4                                  M                                                  Alaska Native Settlement   7
  Grantor trusts   19                           Minimum taxable income           28                Blind  21
  IRD 4                                                                                            Common trust fund     7
  Outside income   39                           N                                                  Complex   41
  Pooled income fund  19                        Net investment income tax        36                Domestic  5
  Revocable Living Trust   5                    Net operating loss     28                          Exemption for  27
  Simple trust 18                               Nonexempt charitable deduction        20           Foreign  37
  Trust 4                                       Nonexempt charitable trust       19 28,            Grantor  3
  Trusts  5                                     Nonqualified deferred compensation                 Inter vivos  3 4, 
Distributable net income (See DNI)                plans  19                                        Nonexempt charitable    19 20 28, , 
DNI 4 29,                                                                                          Pre-need funeral    19
                                                P                                                  Qualified disability 27
E                                                                                                  Qualified revocable   5
                                                Paid preparer  9                                   Simple  41
Electing small business trusts  15              Paid preparer authorization      9                 Split-interest 20
  ESBT (S portion only)  19                     Penalties:                                         Testamentary   3 4, 
  S portion  15                                   Estimated tax      28                            Who must file  5 41, 
Elections:                                        Failure to provide a required TIN   41
  Section 643(e)(3)   31                          Failure to provide information timely    11     W
  Section 643(g)   10                             Late filing of return 11
  Section 645  5                                  Late payment of tax     11                      Where to file 9
  Special rule for qualified revocable trusts 5   Other  11                                       Who must file:
  Treating contributions as paid in prior tax     Trust fund recovery   11                         Decedent's estate    5
    year    28                                    Underpaid estimated tax        11                Trust  5
Electronic deposits   10                        Pooled income funds       15 19 28 29, , ,        Withholding on foreign person   30
ESBTs (See Electing small business trusts)      Pre-need funeral trusts     19

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