Fiduciary Tax Return Filing Requirements:
– Estates: Gross income of $600 or more
or a nonresident alien beneficiary.
– Trusts: Any taxable income, gross income of $600 or more, or a
nonresident alien beneficiary.
– Grantor-Type Trusts: A trust treated as owned entirely by grantors may
not be required to file Form 1041.
Fiduciary Tax Return Tax Year:
– Estates: Date of death is the beginning
of the first tax year. The first year can cover any period of 12 months or
less that ends on the last day of a month. A tax year is chosen when the
first fiduciary return is filed.
– Trusts: Calendar year ending December 31.
Fiduciary Tax Return Tax Year Exceptions: A trust treated entirely as a grantor-type trust may use a
fiscal year.
Fiduciary Tax Return Filing Deadlines:
– Calendar Year 1999: April 17,
2000.
– Fiscal Year: The 15th day of the 4th month following the close of the
tax year.
File a 1999 Form 1041 For:
– Calendar year 1999.
– Fiscal year beginning in 1999, and ending in 2000.
– Fiscal year beginning and ending in 2000, if the 2000 form is not
available by the due date for the return. Use
year 2000 tax rates and incorporate any law changes.
Beneficiary’s Year: Beneficiaries
report income in the tax year in which the trust or estate year
ends.
Estimated Tax Requirements:
– Estates: Estimated payments are only
required for tax years ending two or more years after the decedent’s
death. (This rule may also apply to a decedent’s grantor-type trust.
Refer to "Estimated Tax" in the Form 1041 instructions.)
– Trusts (and estate tax years ending 2 or more years after decedent’s
death): Estimated payments are required if tax is $1,000 or more.
Estimated payments are not required if the entity had no tax liability for
the full 12-month 1999 tax year. Use Form 1041-ES. Safe harbor rules
similar to those for individuals apply to estates and trusts.
A trust or estate in its final year may
allocate estimated tax payments to beneficiaries under IRC §643(g). File
Form 1041-T by the 65th day after the close of the tax year.
Employer Identification Number: Any
trust or estate required to file Form 1041 must obtain an Employer
Identification Number. A grantor-type trust that is not required to file
Form 1041 does not need an EIN.
Exemptions:
– Estates: $600.
– Trusts required to distribute all income currently: $300.
– Trusts permitted to accumulate income: $100.
Extensions:
– Estates: Use Form 2758 to request a
3-month extension. An additional 3-month extension may be granted with a
second Form 2758. Neither extension is automatic.
– Trusts: Form 8736 extends deadline 3 months. An additional 3-month
extension may be granted with Form 8800.
Penalties: Late filing penalty of 5%
of tax per month up to 25% plus late payment penalties and interest. If a
return is more than 60 days late, the minimum late filing penalty is the
smaller of $100 or the tax due. The penalty may be waived if an
explanation showing reasonable cause for the delay is attached to the
return.
