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

Note: CLE credit is not offered on this program

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


Conducted on Thursday, August 1, 2019

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 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 for 2018 and future tax years. 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.

Description

The 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 law brought about differences in the tax consequences for trusts and estates that may result in tax increases for many trusts and beneficiaries on trust and estate income.

The tax law eliminates several common deductions long enjoyed by individual taxpayers and offsets those lost deductions with lower marginal rates and an increased standard deduction. Fiduciaries also utilize many of these deductions; however, trusts and estates did not experience a similar reduction in marginal rates and did 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 law that will impact some trusts and estates is the provision requiring deemed repatriation of previously untaxed foreign-source income from assets passed through a trust or estate during the 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 tax law on Form 1041 Trust and Estate Income Tax reporting and planning.

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Outline

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

Benefits

The panel will discuss these and other relevant topics:

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

Faculty

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

Wallenfelsz, Rebecca
Rebecca Wallenfelsz

Partner
Chapman and Cutler

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

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