Trust Income Tax Reporting After Tax Reform: FAI and DNI Calculation Impact of New Law Provisions

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

Conducted on Thursday, February 22, 2018

Recorded event now available

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Program Materials

This webinar will provide fiduciary tax advisers and compliance professionals with a critical first look at the practical impact of the new tax reform law on trust and estate tax reporting. The panel will detail the specific changes the new law makes to fiduciary deductions, outline the way that distributable net income (DNI) calculations will deviate from fiduciary accounting income (FAI), and detail foreign inclusion provisions effective for the 2017 tax year. The webinar will also offer concrete guidance on steps fiduciary advisers and tax preparers should take now to achieve beneficial tax results and avoid potential pitfalls.


The new tax reform law represents the most sweeping changes to the U.S. income tax code in over three decades—changes that will impact virtually every aspect of American society. While most of the focus of the bill is on business rate cuts and foreign tax changes, the new law will bring about changes in the tax consequences for trusts and estates that will likely result in many trusts and beneficiaries ending up with tax increases on trust and estate income.

The new tax law eliminates a number of common deductions long enjoyed by individual taxpayers and offsets those lost deductions with lower marginal rates and an increased standard deduction. Many of these deductions have also been utilized by fiduciaries; however, trusts and estates did not experience a similar reduction in marginal rates and do not have a standard deduction to trust income.

The elimination of several of these deductions will also lead to discrepancies between FAI and DNI calculations, which fiduciaries and their tax advisers must navigate in both planning and reporting.

Another change in the new law that will impact some trusts and estates is the provision requiring deemed repatriation of previously untaxed foreign-source income from assets passed through trust or estate in the 2017 tax year. Tax compliance professionals serving fiduciaries must be able to identify and calculate this foreign-source income and account for different inclusions for FAI and DNI purposes.

Listen as our experienced panel provides a critical first look at the impact of the new tax law on Form 1041 Trust and Estate Income Tax reporting and planning.



  1. Provisions in new law impacting trust and estate deductions
  2. Potential for uncertainty in treatment of fiduciary fees and other deductions
  3. Implications for FAI and DNI calculations of new provisions
  4. Foreign deemed repatriation provisions


The panel will discuss these and other important topics:

  • Which deductions do trusts and estates lose under the new tax law?
  • How will the changes in the tax law impact the different calculations of FAI and DNI?
  • What are possible areas of uncertainty in IRS interpretation of treatment of fiduciary fees and other itemized deductions?
  • How will the foreign deemed repatriation requirements in the new law affect trust and estate income tax reporting?


Wallenfelsz, Rebecca
Rebecca Wallenfelsz

Chapman and Cutler

Ms. Wallenfelsz has extensive experience representing individuals and institutions in estate planning and trust and...  |  Read More

Jones, Paul
Paul Jones, CPA

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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