PDF document

- 1 -

                                                                                                                                                                   OMB No. 1545-1593
Form 1041-QFT                                         U.S. Income Tax Return for Qualified Funeral Trusts

Department of the Treasury                                         ▶ Go to www.irs.gov/Form1041QFT for the latest information.                                     2021
Internal Revenue Service 
For calendar year 2021 or short year beginning                                                             , 2021, and ending                                               , 2021. 
Part I                                General Information 
1    Name of trust or other entity filing return                                                                                               2  Employer identification number (EIN)

3a  Name and title of trustee 

3b  Number, street, and room or suite no. (If a P.O. box, see the instructions.) 

3c  City or town, state, and ZIP code                                                                                                          4  Number of QFTs included on this return 

5    Check applicable boxes: 
                                  Initial return Amended return        Final return              Change in the fiduciary or fiduciary’s name        Change in fiduciary’s address
Part II                               Tax Computation

                                  1a  Interest income  .  .      . . . .   . . .             . . . . . . . .  . . .        . . .             . .  .   .  1a 
                                  b   Tax-exempt interest. Don’t include on line 1a  .           . . . . . .  . .   1b 
                                  2 a Total ordinary dividends  .    . .   . . .             . . . . . . . .  . . .        . . .             . .  .   .  2a 
                                  b   Qualified dividends  .     . . . .   . . .             . . . . . . . .  . .   2b 
                 Income           3   Capital gain or (loss) (attach Schedule D (Form 1041))         . . . .  . . .        . . .             . .  .   .  3 
                                  4   Other income. List type and amount                                                                                 4 

                                  5   Total income. Combine lines 1a, 2a, 3, and 4  .            . . . . . .  . . .        . . .             . .  .  ▶   5 

                                  6   Taxes  .   .    . . .      . . . .   . . .             . . . . . . . .  . . .        . . .             . .  .   .  6 
                                  7   Trustee fees  .   . .      . . . .   . . .             . . . . . . . .  . . .        . . .             . .  .   .  7 
                                  8   Attorney, accountant, and return preparer fees .           . . . . . .  . . .        . . .             . .  .   .  8 
                                  9   Other deductions    .      . . . .   . . .             . . . . . . . .  . . .        . . .             . .  .   .  9 
                 Deductions
                                  10  Total deductions. Add lines 6 through 9  .             . . . . . . . .  . . .        . . .             . .  .  ▶   10 

                                  11  Taxable income. Subtract line 10 from line 5  .            . . . . . .  . . .        . . .             . .  .  ▶   11 

                                  12  Tax. (If this is a composite return, check here ▶            ) . . . .  . . .        . . .             . .  .  ▶   12 
                                  13  Credits (see instructions). Specify the credits claimed                                                            13 

                                  14  Subtract line 13 from line 12  . .   . . .             . . . . . . . .  . . .        . . .             . .  .   .  14 
                                  15  Net Investment Income Tax from Form 8960, line 21  .           . . . .  . . .        . . .             . .  .   .  15
                                  16  Total tax. Add lines 14 and 15  .    . . .             . . . . . . . .  . . .        . . .             . .  .   .  16 
                                  17  Payments (see instructions)  .   .   . . .             . . . . . . . .  . . .        . . .             . .  .  ▶   17
                 Tax and Payments 18  Tax due. If line 17 is smaller than line 16, enter amount owed       .  . . .        . . .             . .  .   .  18 
                                  19  Overpayment. If line 17 is larger than line 16, enter amount overpaid  .    .        . . .             . .  .   .  19

                                  20  Amount of line 19 to be: a Credited to 2022 estimated tax ▶                              b Refunded ▶              20
                                      Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge
                                      and belief, it is true, correct, and complete. Declaration of preparer (other than trustee) is based on all information of which preparer has any knowledge.
Sign                                  ▲                                                                ▲                                                 May the IRS discuss this return 
Here                                                                                                                                                     with the preparer shown below? 
                                        Signature of trustee or officer representing trustee             Date                                            See instr.    Yes  No 
                                      Print/Type preparer’s name             Preparer’s signature                   Date
Paid                                                                                                                                              Check         if PTIN
                                                                                                                                                  self-employed
Preparer                                              ▶                                                                                      Firm’s EIN ▶
                                      Firm’s name     
Use Only                              Firm’s address ▶                                                                                       Phone no.
For Paperwork Reduction Act Notice, see instructions.                                                      Cat. No. 25368F                               Form 1041-QFT (2021)

- 2 -

Enlarge image

Form 1041-QFT (2021) Page 2

General Instructions • The only contributions to the trust are When To File
contributions by or for such beneficiaries’
Section references are to the Internal benefit. File Form 1041-QFT by April 15, 2022. The
Revenue Code. due date for a composite return is also April
• The trustee makes or previously had made 15, 2022, even if the return includes QFTs that
What’s New the election to treat the trust as a QFT. terminated during the year. If you are filing for
Tax rate schedule for trusts and estates. • The trust would have been treated as owned a short year, file Form 1041-QFT by the 15th
The tax rates have changed for 2021. See by the purchasers of the contracts under the day of the 4th month following the close of
Line 12—Tax, later. grantor trust provisions of the Code if the QFT the short year. If the due date falls on a
election hadn’t been made. Saturday, Sunday, or a legal holiday, file by
Future Developments Note: A trust that isn’t treated as owned by the next business day.
For the latest information about developments the purchaser solely because of the death of Private Delivery Services (PDSs)
related to Form 1041-QFT and its instructions, an individual will be treated as meeting this You can use certain PDSs designated by the
such as legislation enacted after they were requirement during the 60-day period
published, go to www.irs.gov/Form1041QFT. beginning on the date of that individual’s IRS to meet the “timely mailing as timely
death. filing” rule for tax returns. Go to www.irs.gov/
PDS for the current list of designated services.
Reminders If a QFT has multiple beneficiaries, each
Global intangible low-taxed income. The beneficiary’s separate interest under a The PDSs can tell you how to get written
Tax Cuts and Jobs Act of 2017 (TCJA) (P.L. contract is treated as a separate QFT for the proof of the mailing date.
115-97) requires a U.S. shareholder of any purpose of figuring the tax and filing this For the IRS mailing address to use if you’re
controlled foreign corporation to include in return. Each beneficiary’s share of the trust’s using a PDS, go to www.irs.gov/
gross income its global intangible low-taxed income is determined in accordance with the PDSStreetAddresses.
income (GILTI). For more information, see the beneficiary’s interest in the trust. A PDSs can’t deliver items to P.O.
instructions for line 4, Other Income, later. beneficiary’s interest in a trust may be boxes. You must use the U.S.
Miscellaneous itemized deductions subject determined under any reasonable method. Postal Service to mail any item to
to the 2% floor. Expenses that qualify as Whenever these instructions refer to a trust ▲!
CAUTION an IRS P.O. box address.
miscellaneous itemized deductions subject to or QFT, it includes such separate interests
the 2% floor are no longer deductible. that are treated as separate QFTs. Extension of Time To File
Use Form 7004, Application for Automatic
Net investment income tax (NIIT). An estate Making the Election Extension of Time To File Certain Business
or trust may be subject to NIIT. NIIT is a 3.8%
tax on the lesser of an estate’s or trust’s The trustee makes the election to treat a trust Income Tax, Information, and Other Returns,
undistributed net investment income or the as a QFT by filing Form 1041-QFT for the to get an extension of time to file. An
excess of the estate’s or trust’s adjusted trust by the due date (including extensions). extension of time to file a return doesn’t
gross income over a specified threshold You may elect QFT status for a trust’s first extend the time to pay the tax.
amount. NIIT may need to be included when eligible year or for any subsequent year. Once Where To File
figuring estimated tax. In addition, there are made, the election can’t be revoked without
special rules when figuring NIIT for a the consent of the IRS. File Form 1041-QFT at the following address.
composite return. See Composite Return, Department of Treasury
later. Composite Return Internal Revenue Service
Purpose of Form A trustee may file a single, composite Form Kansas City, MO 64999
1041-QFT for some or all QFTs of which he or
The trustee of a trust that has elected to be she is the trustee, including QFTs that had a Who Must Sign
taxed as a qualified funeral trust (QFT) files short tax year. Trustee
Form 1041-QFT to report the income, You must attach a statement to a The trustee, or an authorized representative,
deductions, gains, losses, and tax liability of composite Form 1041-QFT that includes the must sign Form 1041-QFT.
the QFT. The trustee can use the form to following information for each QFT (or
report information for a single QFT or for separate interest treated as a separate QFT). Paid Preparer
multiple QFTs having the same trustee. If filing
Form 1041-QFT for multiple QFTs, please see • The name of the owner or the beneficiary. If Generally, anyone who is paid to prepare a
the rules discussed under Composite Return, you list the name of the owner and that trust tax return must sign the return and fill in the
later. has more than one beneficiary, you must other blanks in the Paid Preparer Use Only
separate the trust into shares held by the area of the return. The person required to sign
Pre-need funeral trusts that don’t qualify as separate beneficiaries. the return must:
QFTs should see the Instructions for Form
1041, U.S. Income Tax Return for Estates and • The type and gross amount of each type of • Complete the required preparer information,
Trusts, for their filing requirements. income earned by the QFT for the tax year. • Sign it in the space provided for the
For capital gains, identify separately the
Qualified Funeral Trust amount of (a) net short-term capital gain, (b) preparer’s signature, and
A QFT is a domestic trust that meets all of net long-term capital gain, (c) 28% rate gain, • Give you a copy of the return in addition to
the following requirements. and (d) unrecaptured section 1250 gain. the copy to be filed with the IRS.
• The trust arose as a result of a contract with • The type and amount of each deduction and Anyone who is paid to prepare the trust’s
a person engaged in the trade or business of credit allocable to the QFT. return must enter their PTIN in the Paid
providing funeral or burial services or property • The tax and payments made for each QFT. Preparer Use Only section. The PTIN entered
must have been issued after September 27,
to provide such services. • The termination date for each QFT that was 2010. For information, see Form W-12, IRS
• The sole purpose of the trust is to hold, terminated during the year. Paid Preparer Tax Identification Number
invest, and reinvest funds in the trust and to Note: When calculating NIIT for a composite (PTIN) Application and Renewal.
use those funds solely to pay for funeral or return, treat each beneficiary’s interest in each
burial services or property to provide such QFT (within the meaning of section 685) as a
services for the benefit of the beneficiaries of separate trust.
the trust.
• The only beneficiaries of the trust are
individuals for whom such services or
property are to be provided at their death
under the contracts described above.

- 3 -

Enlarge image

Form 1041-QFT (2021)                                                                                                                        Page  3 

Paid Preparer Authorization                      Estimated Tax                                      Specific Instructions 
If the trustee wants to allow the IRS to         Generally, a QFT must pay estimated income  
discuss the QFT’s 2021 tax return with the       tax for 2022 if it expects to owe, after           Part I—General Information 
paid preparer who signed it, check the “Yes”     subtracting withholding and credits, at least      Line 1—Name of Trust 
box in the signature area of the return. This    $1,000 in tax. Estimated tax liability is figured  
authorization applies only to the individual     for the individual QFT, and not for a              Copy the exact name from the Form SS-4,  
whose signature appears in the Paid Preparer     composite return taken as a whole. For details     Application for Employer Identification 
Use Only section of the QFT’s  return. It        and exceptions, see Form 1041-ES,                  Number, used to apply for the EIN you are 
doesn’t apply to the firm, if any, shown in that Estimated Income Tax for Estates and Trusts.       using to file Form 1041-QFT. 
section.                                                                                            Line 2—Employer Identification  
If the “Yes” box is checked, the trustee is      Interest and Penalties 
                                                                                                    Number (EIN) 
authorizing the IRS to call the paid preparer to Interest                                           If the QFT isn’t filing as part of a composite  
answer any questions that may arise during 
the processing of the QFT’s return. The          Interest is charged on taxes not paid by the       return, use the EIN of the QFT. If the QFT 
trustee is also authorizing the paid preparer    due date, even if an extension of time to file is  doesn’t have an EIN, it must apply for one. 
to:                                              granted. Interest is also charged on the           Every trustee that elects to file a composite 
                                                 failure-to-pay penalty, failure-to-file penalty,   return must apply for an EIN to be used only 
• Give the IRS any information that’s missing    the accuracy-related penalty, and the fraud        for filing Form 1041-QFT. A trustee must use 
from the QFT’s return;                           penalty. The interest charge is figured at a       a separate EIN for every Form 1041-QFT it 
• Call the IRS for information about the         rate determined under section 6621.                files. 
processing of the QFT’s return or the status                                                        A QFT without an EIN can apply for one. 
of its refund or payment(s); and                 Late Filing of Return 
• Respond to certain IRS notices that the        Section 6651 provides for penalties for late       • Online—A QFT can receive an EIN by 
trustee has shared with the preparer about       filing unless there is a reasonable cause for      Internet and use it immediately to file a return. 
math errors, offsets, and return preparation.    the delay. The law also provides for penalties     Go to the IRS website at www.irs.gov/EIN and 
                                                 for willful attempts to evade payment of tax.      click on “Apply for an EIN Online.”
The trustee isn’t authorizing the paid           The penalty won't be imposed if you can            • By mail or fax—Send in a completed Form  
preparer to receive any refund check, bind       show that the failure to file on time is due to    SS-4. Form SS-4 can be obtained online at 
the QFT to anything (including any additional    reasonable cause and not due to willful            www.irs.gov/OrderForms.
tax liability), or otherwise represent the QFT   neglect.                                           If the QFT hasn’t received its EIN by the 
before the IRS. 
                                                 If you receive a notice about penalty and          time the return is due, write “Applied for” in 
The authorization will automatically end no      interest after you file this return, send us an    the space for the EIN. 
later than the due date (without regard to       explanation, and we will determine if you meet 
extensions) for filing the QFT’s 2022 tax        reasonable-cause criteria. Don’t attach an         Line 3—Address 
return. If the trustee wants to expand the paid  explanation when you file Form 1041-QFT.           Include the suite, room, or other unit number  
preparer’s authorization or revoke the           For more information about penalties for late      after the street address. If the post office 
authorization before it ends, see Pub. 947,      filing, see Late Filing of Return Instructions for doesn’t deliver mail to the street address and 
Practice Before the IRS and Power of             Form 1041.                                         you have a P.O. box, show the box number 
Attorney.                                                                                           instead of the street address. 
                                                 Late Payment of Tax 
                                                                                                    If you want a third party (such as an 
Accounting Methods                               Generally, the penalty for not paying the tax      accountant or an attorney) to receive mail for  
Figure taxable income using the method of        when due is  / 12of 1% of the unpaid amount        the QFT, enter “C/O” on the street address 
accounting regularly used in keeping the         for each month or part of a month that it          line, followed by the third party’s name and 
QFT’s books and records. Generally,              remains unpaid. The maximum penalty is 25%         street address or P.O. box.
permissible methods include the cash             of the unpaid amount. The penalty applies to 
method, the accrual method, or any other         any unpaid tax on the return. Any penalty is in    If you change your address (including a new 
method authorized by the Internal Revenue        addition to interest charges on late payments.     “in care of” name and address) after filing 
Code. In all cases, the method used must                                                            Form 1041-QFT, use Form 8822-B, Change of 
clearly reflect income.                          Underpaid Estimated Tax                            Address or Responsible Party — Business, to 
Generally, the QFT may change its                If the trustee underpaid estimated tax, use        notify the IRS. 
accounting method (for income as a whole or      Form 2210, Underpayment of Estimated Tax           Line 4—Number of QFTs
for any material item) only by getting consent   by Individuals, Estates, and Trusts, to figure 
on Form 3115, Application for Change in          any penalty.                                       If this is a composite return, enter the total  
                                                                                                    number of QFTs (including separate interests  
Accounting Method. For more information,                                                            treated as separate QFTs) included on the  
see Pub. 538, Accounting Periods and                      If you include interest or any of 
Methods.                                                  these penalties with your payment,        return. 
                                                 ▲!       identify and enter these amounts 
                                                 CAUTION
Accounting Period                                         in the bottom margin of Form              Part II—Tax Computation 
                                                 1041-QFT. Don’t include the interest or penalty    Composite Return
All QFTs must use a calendar year as their       amount in the balance of tax due on line 17. 
accounting period. 
                                                 Other Penalties                                             If this is a composite return,  
                                                                                                             enter in Part II the totals for all the 
Rounding Off to Whole Dollars                    Other penalties can be imposed for                 ▲!       QFTs included on the return.
You may round off cents to whole dollars on      negligence, substantial understatement of tax,     CAUTION
your return and statements. If you do round to   and fraud. See Pub. 17, Your Federal Income        Income 
whole dollars, you must round all amounts. To    Tax, for details on these penalties. 
round, drop amounts under 50 cents and                                                              Line 2a—Total Ordinary Dividends 
increase amounts from 50 to 99 cents to the      Final Form 1041                                    Report all ordinary dividends received during  
next dollar. For example, $1.39 becomes $1       If you have an existing EIN(s) that you            the tax year. 
and $2.50 becomes $3. If you have to add         previously used for filing Form 1041 and that      Report capital gain distributions on 
two or more amounts to figure the amount to      you won’t use again (that is, for QFTs             Schedule D (Form 1041), line 13. 
enter on a line, include cents when adding the   included in a composite return), you should 
amounts and round off only the total.            file Form 1041 and check the final return box.

- 4 -

Enlarge image

Form 1041-QFT (2021) Page 4

Line 2b—Qualified Dividends Line 12—Tax Line 18—Tax Due
Enter on line 2b the amount reported on line Tax rate schedule. Unless the instructions You must pay the tax in full when the return is
2a that is a qualified dividend. A qualified that follow for Schedule D or Composite filed. Make the check or money order payable
dividend is a dividend received during the tax Return apply, figure the tax using the Tax to “United States Treasury.” Write the EIN
year from (a) a domestic corporation, or (b) a Rate Schedule below. Enter the tax on line 12. from line 2 of the form and “2021 Form
qualified foreign corporation. A qualified 1041-QFT” on the payment. Enclose, but
dividend doesn’t include any dividend from a 2021 Tax Rate Schedule don’t attach, the payment with Form
corporation if the corporation is (or was) 1041-QFT.
exempt from income tax under section 501 or If taxable
521 for the tax year during which the income But Of the Paperwork Reduction Act Notice. We ask
distribution was made, any amount allowed is: not amount for the information on this form to carry out
as a deduction under section 591, or any Over— over Its tax is: over— the Internal Revenue laws of the United
dividend described under section 404(k). $0 $2,650 10% $0 States. You are required to give us this
Exception. Some dividends may be reported 2,650 9,550 $265 + 24% 2,650 information. We need it to ensure that you are
to the trust as qualified dividends but aren’t 9,550 13,050 1,921 + 35% 9,550 complying with these laws and to allow us to
qualified dividends. See the instructions for 13,050 - - - - 3,146 + 37% 13,050 figure and collect the right amount of tax.
line 2b(2) in the 2021 Instructions for Form You aren’t required to provide the
1041 for more information. Schedule D. If the QFT had both a net information requested on a form that is
capital gain and any taxable income, or any subject to the Paperwork Reduction Act
Line 4—Other Income qualified dividends and any taxable income, unless the form displays a valid OMB control
Enter all other types of income not included complete Part V of Schedule D (Form 1041), number. Books or records relating to a form
on line 1a, 2a, or 3. List the type and amount and then enter the tax from line 45 of or its instructions must be retained as long as
on an attached statement if the QFT(s) has Schedule D on line 12. their contents may become material in the
more than one item. Composite return. If this is a composite administration of any Internal Revenue law.
If you are reporting GILTI, include it on the return, check this box and enter on line 12 Generally, tax returns and return information
attached statement. You must also complete the total of the tax figured separately for each are confidential, as required by section 6103.
and attach Form 8992, Global Intangible Low- QFT using either the 2021 Tax Rate Schedule The time needed to complete and file this
Taxed Income (GILTI). above or Schedule D (Form 1041). form will vary depending on individual
Deductions Line 13—Credits circumstances. The estimated average time is:
Allocation of Deductions for Tax-Exempt Specify the type of credit being claimed and Recordkeeping . . . . 10 hr., 2 min.
Income attach any required credit forms. If you are Learning about the law
Generally, no deduction that would otherwise claiming more than one type of credit, attach or the form . . . . . . 2 hr., 18 min.
be allowable is allowed for any expense that a statement listing the type and amount of Preparing the form . . . 5 hr., 21 min.
is allocable to tax-exempt income, such as each credit claimed. See the Instructions for
interest on state or local bonds. Form 1041 for details on the credits that may Copying, assembling,
be claimed. and sending the form
Exception. State income taxes and business to the IRS . . . . . . . . 48 min.
expenses that are allocable to tax-exempt Line 15—Net Investment Income Tax If you have comments concerning the
interest are deductible. For tax years beginning on or after January 1, accuracy of these time estimates or
Expenses that are directly allocable to 2013, a QFT may be liable for the NIIT suggestions for making this form simpler, we
tax-exempt income are allocable only to enacted under section 1411. To determine if would be happy to hear from you. You can
tax-exempt income. A reasonable proportion this tax applies, see Form 8960, Net send us comments from www.irs.gov/
of expenses indirectly allocable to both Investment Income Tax—Individuals, Estates, FormComments. Or you can send your
tax-exempt income and other income must be and Trusts, and its instructions. comments to Internal Revenue Service, Tax
allocated to each class of income. Line 16—Total Tax Forms and Publications, 1111 Constitution
Ave. NW, IR-6526, Washington, DC 20224.
Limitations on Deductions If the QFT owes any additional taxes (for Don’t send the tax form to this address.
Generally, the amount a QFT has “at-risk” example, alternative minimum tax, recapture Instead, see Where To File, earlier.
limits the loss it can deduct in any tax year. taxes, etc.), include these taxes on line 16. To
Also, section 469 and its regulations generally the left of the entry space, write the type and
limit losses from passive activities to the amount of the tax. Also attach to Form
amount of income derived from all passive 1041-QFT any forms required to figure these
activities. Similarly, credits from passive taxes (for example, Schedule I (Form 1041)).
activities are generally limited to the tax See the Instructions for Form 1041 for more
attributable to such activities. details on additional taxes that may apply.
For details on these and other limitations on Line 17—Payments
deductions, see Deductions in the
Instructions for Form 1041. Include on line 17 any of the following.
Line 9—Other Deductions • Estimated tax payments made for 2021.
Attach your own statement, listing by type • Tax paid with a request for an extension of
and amount all allowable deductions. time to file.
• Federal income tax withheld (for example,
QFTs aren’t allowed a deduction backup withholding).
▲! for a personal exemption. • Credit for tax paid on undistributed capital
CAUTION gains. Also attach Copy B of Form 2439,
Notice to Shareholder of Undistributed
Long-Term Capital Gains.

PDF file checksum: 1605778148

(Plugin #1/9.12/13.0)