Description

This course is designed as a comprehensive guide to the core concepts of trust and estate 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 preparing 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, each with filled-in forms.

Instructor: Michael Frost, CPA

Target Audience

Accounting and Financial Professionals whose practice includes the preparation of fiduciary income tax returns

Course Objectives

Be aware of fiduciary accounting principles

Calculate Distributable Net Income and the income distribution deduction

Prepare Form 1041 and Schedule K-1

Subjects

Relevant updates from One Big Beautiful Bill (OBBBA) legislation incorporated throughout

Classifying receipts between “income” and “corpus” under the Uniform Principal and Income Act

Calculation of DNI utilizing three different methods, a “forms” method (Schedule B), a “code” method, and a “shortcut” method, utilizing a worksheet of common income and expenses

Proper W-2 preparation and procedures in the year of death

Taxpayer passes before taking a required minimum distribution; what must be done? 

Forgetful fiduciaries of simple trusts

Fluctuating trusts – Simple one year, complex the next

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

Allocating tax items to beneficiaries: another K-1

Other considerations: excess deductions on termination

Comprehensive DNI case study, with principal (cost and FMV) and income reconciliation

Comprehensive trust and estate case studies, with filled-in forms

Prerequisites

Experience with the preparation of income tax returns