Form 1041 Schedule D: Reporting Capital Gains for Trusts and Estates

Beneficiary Allocations, Loss Limitations, DNI, Tax Computation Using Maximum Capital Gains Rates, and More

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A


Conducted on Tuesday, October 20, 2020

Recorded event now available

or call 1-800-926-7926
Program Materials

This webinar will provide tax advisers with a thorough and practical guide to reporting trust capital gains income on Schedule D of Form 1041. The panel will demonstrate calculating and allocating capital gains and losses to beneficiaries, explain the distributable net income (DNI) rules of IRC 643(a), and discuss the treatment of excess deductions upon an estate or trust's termination under the final regulations issued September 2020. The webinar will also address basis consistency reporting, split-interest trust allocations, and particular Form 8949 issues.

Description

One of the most complex challenges tax advisers face in completing Form 1041 is calculating, allocating, and reporting trust and estate capital gains on Schedule D. Capital gains reporting for trusts and estates contains complicated provisions not found in disclosures for individuals, which make completing the schedule difficult and time-consuming.

In addition to the task of reconciling capital gains statements and computing net investment income, compliance professionals serving fiduciary clients must also contend with intricate DNI considerations in determining what portion of the trust or estate's capital gains to allocate to beneficiaries. In many cases, the trust document is unclear on capital gains inclusion in DNI, so trust advisers must be able to interpret the trust agreement to determine what portion of gains is subject to maximum capital gains rates.

Additionally, since capital losses are not deductible to the beneficiaries until the trust terminates, tax advisers must pay close attention to the loss limitation reporting on Part IV of Schedule D to ensure that unused losses are correctly reported and carried forward. Allocating gains and losses to the trust or estate as opposed to beneficiaries can often be complicated due to provisions in the operating documents.

Listen as our experienced panel of tax advisers provides a thorough and practical guide to Schedule D Capital Gain and Loss reporting for Trusts and Estates Form 1041.

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Outline

  1. Calculating capital gains and losses
  2. Allocating gains and losses between trust/estate and beneficiaries (Part III)
  3. Capital loss limitation (Part IV)
  4. Tax computation using maximum capital gains rates (Part V)
  5. Navigating basis consistency rules
  6. Reporting capital gains for split-interest trusts on Form 5227

Benefits

The panel will discuss these and other important topics in this webinar:

  • Under what circumstances may capital gains be included in DNI, and how does DNI inclusion impact Schedule D reporting?
  • Line-by-line guidance to completing Schedule D
  • Calculating maximum capital gains rates for Part IV of Schedule D
  • Capital loss limitations and carryforwards to beneficiaries

Faculty

Bridgers, Griffin
Griffin H. Bridgers

Attorney
Hutchins & Associates

Mr. Bridgers' practice encompasses all areas of private wealth and family business. In addition to estate...  |  Read More

Edmondson, S. Gray
S. Gray Edmondson

Partner
Edmondson Sage Allen

Mr. Edmondson practices in partnership, corporate, and individual tax planning; business transactions, including...  |  Read More

Jones, Paul
Paul Jones, CPA

Atty
Paul Jones Attorney

Mr. Jones is an attorney and CPA. He focuses his practice on tax law, business law, estate planning, expat tax and...  |  Read More

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