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  FORM                            STATE OF HAWAII—DEPARTMENT OF TAXATION

  N-405                    Tax on Accumulation Distribution                                                                                      2023
  (Rev. 2023)                                                                                                                                                                                N405_I 2023A 01 VID01
                                                           of Trusts
                                          † Attach to beneficiary’s tax return.
Name(s) as shown on return                                                                                                                       Social Security Number

Name and mailing address of trust                                                                                                                Federal Employer I.D. No.

Type of Trust:                    Beneficiary’s date of birth   Enter number of trusts from which you received accumulation 
  Domestic      Foreign                                       distributions in this tax year (see General Instructions). ............... †

Part I  Average Income and Determination of Computation Years
1 Amount of current distribution that is considered distributed in earlier tax years. (From Schedule J (Form N-40), 
  line 31 column (a).) .................................................................................................................................................................. 1
2 Distributions of income accumulated before you were born or reached age 21.  ...................................................................                                        2
3 Line 1 minus line 2.  ................................................................................................................................................................  3
4 Taxes imposed on the trust on amounts from line 3. (From Schedule J (Form N-40), line 31 column (b).) ............................                                                      4
5 Total (add lines 3 and 4).  ........................................................................................................................................................    5
6 Tax-exempt interest included on line 5.  (From Schedule J (Form N-40), line 31 column (c)) ................................................                                             6
7 Taxable part of line 5 (Line 5 minus line 6).  ............................................................................................................................             7
8 Number of trust’s earlier tax years in which amounts on line 7 are considered distributed.  ...................................................                                         8
9 Average annual amount considered distributed (divide line 3 by line 8).  ......................................                             9
10  Multiply line 9 by .25 (25%).  ..........................................................................................................  10
11  Number of earlier tax years to be taken into account (see Instructions).  ...............................................................................                             11
12  Average amount for recomputing tax (divide line 7 by line 11).  Enter here and in each column on line 15 ...........................                                                  12
13  Enter your taxable income before this                  2022        2021                                              2020                    2019                                        2018
  distribution for the 5 immediately preceding 
  tax years (see Instructions).  ..........................
Part II Computation of Tax Attributable to the Accumulation Distribution

                                                                                                                         (a) ______              (b) ______                                  (c) ______
14  Enter the amounts from line 13, eliminating the highest and lowest 
  taxable income years.  ..........................................................................................    14

15  Enter amount from line 12 in each column. ...........................................................              15

16  Recomputed taxable income (add lines 14 and 15). .............................................                     16

17  Income tax on amounts on line 16 (see Instructions). ...........................................                   17

18  Income tax before credits on amounts on line 14. .................................................                 18

19  Additional tax before credits (line 17 minus line 18, but not less than zero). ........                            19

20  Tax credit adjustment (see Instructions). ...............................................................          20

21  Line 19 minus line 20. ........................................................................................... 21

22  Add amounts on line 21, columns (a), (b), and (c) and enter here. .........................................................................................                           22 

23  Divide the amount on line 22 by 3.  .........................................................................................................................................         23 

24  Multiply the amount on line 23 by the number of years on line 11.  ........................................................................................                           24 

25  Enter the amount from line 4.  .................................................................................................................................................      25 

26  Partial tax (line 24 minus line 25).  If less than zero, enter zero.  Enter here and as indicated in the Instructions.  ...............                                               26
                                                                                                                                                 FORM N-405 (Rev. 2023)
                                                              ID NO 01

FORM N-405                                                                                                                                            PAGE 2
(REV. 2023)

                                                                                                             income amounts considered distributed in that 
General Instructions                                   Specificyear as a result of prior accumulation distribu-                                                  Instructions 
(Section references are to the Internal Revenue                                                              tions whether from the same or another trust, 
Code.)                                                 Part I—Average Income and 
                                                                                                             and whether made in an earlier year or the cur-
For tax years beginning after August 5, 1997,          Determination of Computation                          rent year.
the tax on accumulation distributions from trusts      Years
                                                                                                             If your taxable  income as adjusted  is less 
does not apply to most domestic trusts. The tax        Line 1.—For a nonresident individual or foreign       than zero, enter zero.
applies to foreign trusts, certain domestic trusts     corporation, include only the part of the accu-
that were once foreign  trusts, and certain do-        mulation distribution that  is attributable to  Ha-   Part II—Computation of Tax 
mestic trusts created before March 1, 1984. For        waii sources or is effectively connected with a 
more information, see section 665(c).                  trade or business carried on in Hawaii.               Attributable to the Accumulation 
Purpose of Form                                        Line 2.—Enter any amount from line 1 that rep-        Distribution
                                                       resents UNI of a domestic trust  accumulated          In the column header above line 14, enter the 
The beneficiary of a trust that accumulated, in-       before you were born or reached age 21. How-          taxable income YEAR that applies to the infor-
stead of distributing, its income currently uses       ever,  if  the  multiple trust  rule applies, see the mation contained for lines 14 through 23 of that 
Form N-405 to figure the partial tax under sec-        instructions for line 4.                              column.
tion  667. The  fiduciary  notifies  the  beneficiary 
of an “accumulation distribution” by completing        Line 4. Multiple— Trust Rule. If you received         Line 17.—Figure the income tax on the income 
Part IV of Schedule J (Form N-40).                     accumulation  distributions  from two or more         on line 16 using the tax rates in effect for your 
                                                       other trusts that were considered to have been        particular earlier tax year shown in each of the 
   If you received a distribution for this tax year    made in any of the earlier tax years in which the     three columns. You may use the Tax Table or 
from a trust that accumulated its income instead       current accumulation distribution is considered       Tax Rate Schedules. The Tax Rate Schedules 
of distributing it to you each year (and the trust     to have been made, do not include on line 4 the       and appropriate prior year forms  can be ob-
paid taxes on that income), you must complete          taxes attributable to the current accumulation        tained from any taxation district office.
Form N-405  to compute any additional  tax li-         distribution considered to have been distributed 
ability. The trustee must give you a completed         in the same earlier tax year(s).                      Line 18.—Enter your income  tax as originally 
Part IV of Schedule J (Form N-40) so you can                                                                 reported, corrected, or amended, before reduc-
complete this form.                                    For this special rule only count as trusts            tion for any credits for your particular earlier 
                                                       those trusts for which the sum of this accumu-        year shown in each of the three columns.
   If you received  accumulation  distributions        lation distribution and any earlier accumulation 
from more than one trust during the current tax        distributions from the trust which are considered     Line 20.—Nonrefundable  credits that are lim-
year, prepare a separate Form N-405 for each           under section 666(a) to have been distributed         ited to tax liability may be changed because of 
trust from which you received an accumulation          in the same earlier tax year, is $1,000 or more.      an accumulation distribution. If the total allow-
distribution.  You can arrange the  distributions                                                            able credits for  any of  the three computation 
in any order you want them considered to have          Foreign  trust.—If  the trust  is a foreign trust,    years increases, enter the increase on line 20. 
been made.                                             see section 665(d)(2).                                However, do not treat as an increase the part of 
                                                       Line  8.—You can determine the number of              the credit that was allowable as a carryforward 
Definitionsyears in which the UNI is deemed to have been                                                     credit in the current or any preceding year other 
                                                       distributed  by counting  the “throwback  years”      than the computation year.
Undistributed Net Income (UNI).— Undistrib-            for which there are entries on line 26 through        To refigure these credits, you must consider 
uted net income is the distributable net income        30 of Part IV of Schedule J (Form N-40). These        the changes to the tax before credits for each 
(DNI) of the trust for any tax year less: (1) the      throwback rules apply even if  you would not          of the three computation years due to previous 
amount of income  required  to be distributed          have been entitled to receive a distribution in       accumulation distributions.
currently and any other amounts properly paid          the earlier tax year if the distribution had actu-
or credited or required to be distributed to ben-      ally been made then.                                  Attach the proper form for any credit you re-
eficiaries in the tax year; and (2) the taxes im-                                                            figure. The amount determined for items on this 
posed on the trust attributable to such DNI.           Note:  There can be more than five “throw-            line is limited to tax law provisions in effect in 
                                                       back years.”                                          those years involved.
Accumulation Distribution.—An accumula-
tion distribution is the excess of amounts prop-       Line 11.—From the number of years entered on          Line 26.—Attach this form to the current income 
erly paid, credited, or required to be distributed     line 8, subtract any year in which the distribution   tax return being filed by the beneficiary and add 
(other than income required  to be distributed         from column (a), Part IV of Schedule J (Form          the amount (if greater than zero) on line 26 to 
currently) over the DNI of the trust reduced by        N-40) is less than the amount on line 10 of Form      the total tax liability (before any tax credits) on 
the amount of income required to be distributed        N-405. If the distribution  for each throwback        the current income tax return of the beneficiary.
currently.                                             year is more than line 10, then enter the same 
                                                       number on line 11 as you entered on line 8.           If Hawaii estate taxes or Hawaii generation-
   Generally, except for tax-exempt interest,                                                                skipping transfer taxes apply to the accumula-
the distribution loses it character upon distribu-     Line 13.—Enter your taxable incomes for years         tion distribution, reduce the partial tax propor-
tion  to  the  beneficiary.  See  section  667(d)  for 2018 - 2022, even if less than five years of the      tionately for those taxes. See section 667(b)(6), 
special rules for foreign trusts.                      trust  had  accumulated income after  you be-         for the computation and adjust the numerator 
                                                       came 21. Use the taxable income as reported,          and  denominator  accordingly  for Hawaii  taxes 
                                                       amended by you, or as changed by the Hawaii           paid.
                                                       Department of Taxation. Include in the taxable