Income Taxation of Trusts and Estates and Preparing Form 1041 Part 1

Author: Steven G. Siegel

Planners are using trusts for their clients more now than ever before. The pandemic has illustrated how trusts are more flexible for planning than powers of attorney or probate administration.

Issues of asset protection from financial and matrimonial creditors as well as concerns about immaturity of heirs have spiked a growth of trust preparation. It has never been more critical to understand the ins and outs of income taxation of trusts and estates and the preparation of the Fiduciary Income Tax Return.

Grantor trusts offer a wide range of simple and sophisticated tax and estate planning advantages.

This course will go through what should be considered in understanding how trusts and estates are taxed, look at a line-by-line explanation of Form 1041, and work through several problems, including a simple trust, complex trusts and a final year’s fiduciary income tax return illustrating how Form 1041 should be completed in various situations for different taxpayers.

Publication Date: February 2023

Designed For
This course is essential for CPAs, CFPs, enrolled agents, estate planners, tax attorneys and other professionals who advise clients on tax, retirement and estate planning, and other wealth management matters.

Topics Covered

• Estates: Basic Concepts and Issues
• Trusts: Basic Concepts and Issues
• Election to Treat a Qualified Revocable Trust as Part of the Decedent's Estate
• Fiduciary Tax and Accounting Issues
• Income Reportable by Fiduciaries

Learning Objectives

• Identify how to help clients make the right choices in estate and trust planning
• Recognize how to apply the concepts of fiduciary income taxation
• Describe the various trust options available in tax and estate planning
• Recognize how capital gains must be handled
• Recognize how to address what makes up every line of Form 1041
• Identify how to prepare a variety of Form 1041s to correctly illustrate different circumstances

Level
Intermediate

Instructional Method
Self-Study

NASBA Field of Study
Taxes (4 hours)

Program Prerequisites
Basic knowledge of federal wealth transfer taxes.

Advance Preparation
None