This course is designed for participants to understand the core concepts of trust and estate return income tax preparation. The course explains the common terminology and complicated income tax rules of estates and trusts, fiduciary accounting, and an introduction to or refresher on how to prepare Form 1041. This practical, over 300-page manual is an excellent reference source for your practice, which begins with quite simple cases. Building upon that base throughout the manual, the course ends with two complicated preparation cases, one trust and one estate.

Major Topics:

  • Classifying receipts between “Income” and “Corpus” under the Uniform Principle and Income Act
  • Forgetful fiduciaries of Simple Trusts
  • Fluctuating trusts – Simple one year, complex the next
  • Calculation of DNI utilizing a “Forms” method (Schedule B), “Code” method, and “Shortcut” method utilizing a worksheet
  • Dividing income in the year of death
  • Overview of Subchapter J
  • Form preparation issues – Filing requirements and line-by-line explanations of Form 1041
  • Taxable income of estates and trusts and expense allocation issues
  • Specific deductions and miscellaneous itemized deductions
  • Income in respect of a decedent
  • The income distribution deduction calculation
  • Relation of principal and income law to DNI
  • Understanding how to handle capital gains and losses
  • Tax-planning concerns and special issues
  • Allocating tax items to beneficiaries: another K-1
  • Reporting in light of the net investment income tax
  • Comprehensive DNI calculation case study
  • Comprehensive trust case study
  • Overview of estate case study, filled-in forms

Learning Objectives:

  • Be aware of fiduciary accounting principles
  • Calculate Distributable Net Income and the income distribution deduction
  • Prepare Form 1041 and Schedule K-1

Designed For: CPAs whose practice includes the preparation of fiduciary income tax returns
Level of Knowledge: Intermediate
Prerequisite: Experience with the preparation of income tax returns
Advanced Preparation: None
Credits: 8
Field of Study: Taxes(8)
CFP Credit: Yes

Live Seminar Course Schedule