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Forma 1041 Plán A, B, G, J a K-1 Návody

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Rev. 2023

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Department of the Treasury  
Internal Revenue Service  
2023  
Instructions for Form 1041  
and Schedules A, B, G, J,  
and K-1  
U.S. Income Tax Return for Estates and Trusts  
Section references are to the Internal Revenue Code unless  
otherwise noted.  
Contents  
Page  
Schedule A—Charitable Deduction . . . . . . . . . . . . . 28  
Schedule B—Income Distribution Deduction . . . . . . . 29  
Schedule G—Tax Computation and Payments . . . . . 31  
Net Investment Income Tax (NIIT) . . . . . . . . . . . . . . 36  
Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . 37  
Contents  
Page  
What's New . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1  
Reminders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1  
Photographs of Missing Children . . . . . . . . . . . . . . . . 2  
The Taxpayer Advocate Service (TAS) . . . . . . . . . . . . 2  
How To Get Forms and Publications . . . . . . . . . . . . . . 3  
General Instructions . . . . . . . . . . . . . . . . . . . . . . . . . 3  
Purpose of Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3  
Schedule J (Form 1041)—Accumulation  
Distribution for Certain Complex Trusts . . . . . . . . 39  
Schedule K-1 (Form 1041)—Beneficiary's Share of  
Income, Deductions, Credits, etc. . . . . . . . . . . . . 41  
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53  
Income Taxation of Trusts and Decedents'  
Estates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3  
Future Developments  
Abusive Trust Arrangements . . . . . . . . . . . . . . . . . . . 3  
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4  
Who Must File . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5  
Electronic Filing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8  
When To File . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8  
Period Covered . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8  
Where To File . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9  
Who Must Sign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9  
Accounting Methods . . . . . . . . . . . . . . . . . . . . . . . . . 9  
Accounting Periods . . . . . . . . . . . . . . . . . . . . . . . . . 10  
Rounding Off to Whole Dollars . . . . . . . . . . . . . . . . . 10  
Estimated Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10  
Interest and Penalties . . . . . . . . . . . . . . . . . . . . . . . 10  
Other Forms That May Be Required . . . . . . . . . . . . . 11  
Additional Information . . . . . . . . . . . . . . . . . . . . . . . 13  
Assembly and Attachments . . . . . . . . . . . . . . . . . . . 13  
Special Reporting Instructions . . . . . . . . . . . . . . . . . 13  
Specific Instructions . . . . . . . . . . . . . . . . . . . . . . . . 18  
Name of Estate or Trust . . . . . . . . . . . . . . . . . . . . . . 18  
Name and Title of Fiduciary . . . . . . . . . . . . . . . . . . . 18  
Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18  
A. Type of Entity . . . . . . . . . . . . . . . . . . . . . . . . . . . 18  
B. Number of Schedules K-1 Attached . . . . . . . . . . . 19  
C. Employer Identification Number . . . . . . . . . . . . . . 19  
D. Date Entity Created . . . . . . . . . . . . . . . . . . . . . . . 19  
E. Nonexempt Charitable and Split-Interest Trusts . . . 19  
F. Initial Return, Amended Return, etc. . . . . . . . . . . . 20  
G. Section 645 Election . . . . . . . . . . . . . . . . . . . . . . 20  
Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21  
Deductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22  
Limitations on Deductions . . . . . . . . . . . . . . . . . . . . 23  
Tax and Payments . . . . . . . . . . . . . . . . . . . . . . . . . 27  
For the latest information about developments related to  
Form 1041 and Schedules A, B, G, J, K-1 and its instructions,  
such as legislation enacted after they were published, go to  
What's New  
Due date of return. Calendar year estates and trusts must  
file Form 1041 by April 15, 2024. If you live in Maine or  
Massachusetts, you have until April 17, 2024, because of the  
Patriots' Day and Emancipation Day holidays.  
Capital gains and qualified dividends. For tax year 2023,  
the 20% maximum capital gains rate applies to estates and  
trusts with income above $14,650. The 0% and 15% rates  
apply to certain threshold amounts. The 0% rate applies to  
amounts up to $3,000. The 15% rate applies to amounts over  
$3,000 and up to $14,650.  
Bankruptcy estate filing threshold. For tax year 2023, the  
requirement to file a return for a bankruptcy estate applies  
only if gross income is at least $13,850.  
Qualified disability trust. For tax year 2023, a qualified  
disability trust can claim an exemption of up to $4,700. This  
amount is not subject to phaseout.  
Qualified sick and family leave credits. Generally, the  
credits for qualified sick and family leave wages have expired.  
However, qualified sick and family leave wages paid in 2023  
for leave taken before April 1, 2021, and for leave taken after  
March 31, 2021, and before October 1, 2021, may be eligible  
to claim the credits in 2023.  
Reminders  
Review a copy of the will or trust instrument, including any  
amendments or codicils, before preparing an estate's or  
trust's return.  
We encourage you to use Form 1041-V, Payment Voucher  
for Estates and Trusts, to accompany your payment of a  
Jan 9, 2024  
Cat. No. 11372D  
   
balance of tax due on Form 1041, particularly if your payment  
is made by check or money order.  
Item G. Section 645 election. If the estate has made a  
section 645 election, the executor must check item G and  
provide the taxpayer identification number (TIN) of the  
electing trust with the highest total asset value in the box  
provided.  
The executor must also attach a statement to Form 1041  
providing the following information for each electing trust  
(including the electing trust provided in item G): (a) the name  
of the electing trust, (b) the TIN of the electing trust, and (c)  
the name and address of the trustee of the electing trust.  
Form 1041 e-filing. When e-filing Form 1041, use either  
Form 8453-FE, U.S. Estate or Trust Declaration for an IRS  
e-file Return, or Form 8879-F, IRS e-file Signature  
Authorization for Form 1041.  
Form 8978 Worksheet. A Form 8978  
the instructions to calculate the amount due when there is a  
negative amount from Form 8978, line 14, that was not used  
to reduce Schedule G, line 3, to zero, and you have chapter 1  
taxes and/or tax and interest from Form 8621.  
Advanced manufacturing production credit. Section  
13502 of the Inflation Reduction Act of 2022 (IRA 2022)  
created the advanced manufacturing production credit for  
certain components produced and sold after 2022. See Form  
7207, Advanced Manufacturing Production Credit, and its  
instructions and section 45X.  
Note. Form 8879-F can only be associated with a single  
Form 1041. Form 8879-F can no longer be used with multiple  
Forms 1041.  
For more information about e-filing returns through MeF,  
see Pub. 4164, Modernized e-File (MeF) Guide for Software  
Developers and Transmitters.  
Net operating loss (NOL) carryback. Generally, an NOL  
arising in a tax year beginning in 2021 or later may not be  
carried back and instead must be carried forward indefinitely.  
However, farming losses arising in tax years beginning in  
2021 or later may be carried back 2 years and carried  
forward indefinitely.  
For special rules for NOLs arising in 2018, 2019 or 2020,  
see Pub. 536, Net Operating Losses (NOLs) for Individuals,  
Estates, and Trusts, for more information.  
Section 965. Section 965(a) inclusion amounts are not  
applicable for tax year 2021 and later years. However,  
section 965 may still apply to certain estates and trusts  
(including the S portion of electing small business trusts  
(ESBTs)) where a section 965(h) or section 965(i) election  
has been made.  
Photographs of Missing Children  
The Internal Revenue Service is a proud partner with the  
Photographs of missing children selected by the Center may  
appear in instructions on pages that would otherwise be  
blank. You can help bring these children home by looking at  
the photographs and calling 1-800-THE-LOST  
(1-800-843-5678) if you recognize a child.  
The Taxpayer Advocate Service (TAS)  
The TAS Is Here To Help You  
What Is TAS?  
Section 1061 reporting. Section 1061 recharacterizes  
certain long-term capital gains of applicable partnership  
interests held by an estate or trust as short-term capital  
Excess deductions on termination. Under Final  
Regulations - TD9918, each excess deduction on termination  
of an estate or trust retains its separate character as an  
amount allowed in arriving at adjusted gross income (AGI), a  
non-miscellaneous itemized deduction, or a miscellaneous  
itemized deduction.  
TAS is an independent organization within the IRS that  
helps taxpayers and protects taxpayer rights. TAS strives to  
ensure that every taxpayer is treated fairly and that you know  
and understand your rights under the Taxpayer Bill of Rights.  
How Can You Learn About Your Taxpayer Rights?  
Itemized Deductions, later, for more information.  
The Taxpayer Bill of Rights describes 10 basic rights that all  
taxpayers have when dealing with the IRS. Go to  
TaxpayerAdvocate.IRS.gov to help you understand what  
these rights mean to you and how they apply. These are your  
rights. Know them. Use them.  
Qualified Opportunity Investment. With the exception of  
grantor trusts, if you held a qualified investment in a qualified  
opportunity fund (QOF) at any time during the year, you must  
file your return with Form 8997, Initial and Annual Statement  
of Qualified Opportunity Fund (QOF) Investments, attached  
to your return. For more information, see Form 8997 and its  
instructions.  
Extension of time to file. The extension of time to file an  
estate (other than a bankruptcy estate) or trust return is 51/2  
months.  
Item A. Type of entity. On page 1 of Form 1041, item A,  
taxpayers should select more than one box, when  
appropriate, to reflect the type of entity.  
Item F. Net operating loss (NOL) carryback. If an  
amended return is filed for an NOL carryback, check the Net  
operating loss carryback box in item F. See Amended Return,  
later, for complete information.  
What Can TAS Do for You?  
TAS can help you resolve problems that you can't resolve  
with the IRS. And their service is free. If you qualify for their  
assistance, you will be assigned to one advocate who will  
work with you throughout the process and will do everything  
possible to resolve your issue. TAS can help you if:  
Your problem is causing financial difficulty for you, your  
family, or your business;  
You face (or your business is facing) an immediate threat  
of adverse action; or  
You’ve tried repeatedly to contact the IRS but no one has  
responded, or the IRS hasn’t responded by the date  
promised.  
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Instructions for Form 1041 (2023)  
     
(the grantor) is treated as the owner of the trust's assets.  
Such a trust is a grantor type trust. See Grantor Type Trusts,  
later, under Special Reporting Instructions.  
How Can You Reach TAS?  
Puerto Rico. To find your advocate’s number:  
A trust or decedent's estate figures its gross income in  
much the same manner as an individual. Most deductions  
and credits allowed to individuals are also allowed to estates  
and trusts. However, there is one major distinction. A trust or  
decedent's estate is allowed an income distribution  
deduction for distributions to beneficiaries. To figure this  
deduction, the fiduciary must complete Schedule B. The  
income distribution deduction determines the amount of any  
distributions taxed to the beneficiaries.  
Download Pub. 1546, The Taxpayer Advocate Service Is  
Your Voice at the IRS, available at IRS.gov/pub/irs-pdf/  
Call the IRS toll free at 800-TAX-FORM (800-829-3676) to  
order a copy of Pub. 1546;  
Check your local directory; or  
Call TAS toll free at 877-777-4778.  
For this reason, a trust or decedent's estate is sometimes  
referred to as a “pass-through entity.” The beneficiary, and not  
the trust or decedent's estate, pays income tax on their  
distributive share of income. Schedule K-1 (Form 1041) is  
used to notify the beneficiaries of the amounts to be included  
on their income tax returns.  
How Else Does TAS Help Taxpayers?  
TAS works to resolve large-scale problems that affect many  
taxpayers. If you know of one of these broad issues, report it  
to TAS at IRS.gov/SAMS. Be sure to not include any personal  
taxpayer information.  
Before preparing Form 1041, the fiduciary must figure the  
accounting income of the estate or trust under the will or trust  
instrument and applicable local law to determine the amount,  
if any, of income that is required to be distributed, because  
the income distribution deduction is based, in part, on that  
amount.  
How To Get Forms and Publications  
Internet. You can access the IRS website 24 hours a  
day, 7 days a week, at IRS.gov to:  
Download forms, including talking tax forms, instructions,  
and publications;  
Abusive Trust Arrangements  
Order IRS products;  
Certain trust arrangements claim to reduce or eliminate  
federal taxes in ways that are not permitted under the law.  
Abusive trust arrangements are typically promoted by the  
promise of tax benefits with no meaningful change in the  
taxpayer's control over or benefit from the taxpayer's income  
or assets. The promised benefits may include reduction or  
elimination of income subject to tax; deductions for personal  
expenses paid by the trust; depreciation deductions of an  
owner's personal residence and furnishings; a stepped-up  
basis for property transferred to the trust; the reduction or  
elimination of self-employment taxes; and the reduction or  
elimination of gift and estate taxes. These promised benefits  
are inconsistent with the tax rules applicable to trust  
arrangements.  
Use the online Internal Revenue Code, regulations, and  
other official guidance;  
Research your tax questions;  
Search publications by topic or keyword;  
Apply for an employer identification number (EIN); and  
Sign up to receive local and national tax news by email.  
Tax forms and publications. The estate or trust can  
download or print all of the forms and publications it may  
need on IRS.gov/FormsPubs. Otherwise, the estate or trust  
can go to IRS.gov/OrderForms to place an order and have  
forms mailed to it. The IRS will process your order for forms  
and publications as soon as possible.  
Abusive trust arrangements often use trusts to hide the  
true ownership of assets and income or to disguise the  
substance of transactions. These arrangements frequently  
involve more than one trust, each holding different assets of  
the taxpayer (for example, the taxpayer's business, business  
equipment, home, automobile, etc.). Some trusts may hold  
interests in other trusts, purport to involve charities, or are  
foreign trusts. Funds may flow from one trust to another trust  
by way of rental agreements, fees for services, purchase  
agreements, and distributions.  
General Instructions  
Purpose of Form  
The fiduciary of a domestic decedent's estate, trust, or  
bankruptcy estate uses Form 1041 to report:  
The income, deductions, gains, losses, etc., of the estate  
or trust;  
The income that is either accumulated or held for future  
distribution or distributed currently to the beneficiaries;  
Any income tax liability of the estate or trust;  
Employment taxes on wages paid to household  
Some of the abusive trust arrangements that have been  
identified include unincorporated business trusts (or  
organizations), equipment or service trusts, family residence  
trusts, charitable trusts, and final trusts. In each of these  
trusts, the original owner of the assets nominally subject to  
the trust effectively retains the authority to cause financial  
benefits of the trust to be directly or indirectly returned or  
made available to the owner. For example, the trustee may be  
the promoter, a relative, or a friend of the owner who simply  
carries out the directions of the owner whether or not  
permitted by the terms of the trust.  
employees; and  
Net Investment Income Tax (NIIT). See Schedule G, Part I,  
line 5, and the Instructions for Form 8960.  
Income Taxation of Trusts and  
Decedents' Estates  
A trust or a decedent's estate is a separate legal entity for  
federal tax purposes. A decedent's estate comes into  
existence at the time of death of an individual. A trust may be  
created during an individual's life (inter vivos) or at the time of  
their death under a will (testamentary). If the trust instrument  
contains certain provisions, then the person creating the trust  
When trusts are used for legitimate business, family, or  
estate planning purposes, either the trust, the beneficiary, or  
3
Instructions for Form 1041 (2023)  
                   
the transferor of assets to the trust will pay the tax on income  
generated by the trust property. Trusts can't be used to  
transform a taxpayer's personal, living, or educational  
expenses into deductible items, and can't seek to avoid tax  
liability by ignoring either the true ownership of income and  
assets or the true substance of transactions. Therefore, the  
tax results promised by the promoters of abusive trust  
arrangements are not allowable under the law, and the  
participants in and promoters of these arrangements may be  
subject to civil or criminal penalties in appropriate cases.  
All accrued income of a decedent who reported their  
income on the cash method of accounting,  
Income accrued solely because of the decedent's death in  
the case of a decedent who reported their income on the  
accrual method of accounting, and  
Income to which the decedent had a contingent claim at  
the time of their death.  
Some examples of IRD for a decedent who kept their  
books on the cash method are:  
Deferred salary payments that are payable to the  
decedent's estate,  
For more details, including the legal principles that control  
the proper tax treatment of these abusive trust arrangements,  
see Notice 97-24, 1997-1 C.B. 409.  
Uncollected interest on U.S. savings bonds,  
Proceeds from the completed sale of farm produce, and  
The portion of a lump-sum distribution to the beneficiary of  
For additional information about abusive tax  
arrangements, go to IRS.gov and type “Abusive Trusts” in the  
search box.  
a decedent's individual retirement arrangement (IRA) that  
equals the balance in the IRA at the time of the owner's  
death. This includes unrealized appreciation and income  
accrued to that date, less the aggregate amount of the  
owner's nondeductible contributions to the IRA. Such  
amounts are included in the beneficiary's gross income in the  
tax year that the distribution is received.  
Definitions  
Adjusted gross income (AGI). Compute the AGI of an  
estate or a non-grantor trust by subtracting the following from  
total income on line 9 of page 1.  
1. The administration costs of the estate or trust (the total  
of lines 12, 14, and 15a to the extent they are costs incurred  
in the administration of the estate or trust) that wouldn't have  
been incurred if the property were not held by the estate or  
trust.  
The IRD has the same character it would have had if the  
decedent had lived and received such amount.  
Deductions and credits in respect of a decedent. The  
following deductions and credits, when paid by the  
decedent's estate, are allowed on Form 1041 even though  
they were not allowable on the decedent's final income tax  
return.  
2. The income distribution deduction (line 18).  
3. The amount of the exemption (line 21).  
Business expenses deductible under section 162.  
Interest deductible under section 163.  
Taxes deductible under section 164.  
Percentage depletion allowed under section 611.  
Foreign tax credit.  
4. The net operating loss deduction (NOLD) claimed on  
line 15b.  
Electing small business trust (ESBT). Compute the  
AGI of the S portion of an ESBT in the same manner as an  
individual taxpayer, except that administration costs allocable  
to the S portion (to the extent they are costs incurred in the  
administration of the trust that wouldn't have been incurred if  
the property were not held by the estate or trust) shall be  
deducted in arriving at AGI.  
For more information on IRD, see section 691 and Pub.  
559, Survivors, Executors, and Administrators.  
Income required to be distributed currently. Income  
required to be distributed currently is income that is required  
under the terms of the governing instrument and applicable  
local law to be distributed in the year it is received. The  
fiduciary must be under a duty to distribute the income  
currently, even if the actual distribution is not made until after  
the close of the trust's tax year. See Regulations section  
1.651(a)-2.  
Fiduciary. A fiduciary is a trustee of a trust, or an executor,  
executrix, administrator, administratrix, personal  
representative, or person in possession of property of a  
decedent's estate.  
Beneficiary. A beneficiary includes an heir, a legatee, or a  
devisee.  
Decedent's estate. The decedent's estate is an entity that  
is formed at the time of an individual's death and is generally  
charged with gathering the decedent's assets, paying the  
decedent's debts and expenses, and distributing the  
remaining assets. Generally, the estate consists of all the  
property, real or personal, tangible or intangible, wherever  
situated, that the decedent owned an interest in at death.  
Distributable net income (DNI). The income distribution  
deduction allowable to estates and trusts for amounts paid,  
credited, or required to be distributed to beneficiaries is  
limited to DNI. This amount, which is figured on Schedule B,  
line 7, is also used to determine how much of an amount  
paid, credited, or required to be distributed to a beneficiary  
will be includible in their gross income.  
Income in respect of a decedent (IRD). When completing  
Form 1041, you must take into account any items that are  
IRD.  
In general, IRD is income that a decedent was entitled to  
receive but that was not properly includible in the decedent's  
final income tax return under the decedent's method of  
accounting.  
Note. Any reference in these instructions to “you” means the  
fiduciary of the estate or trust.  
Trust. A trust is an arrangement created either by a will or by  
an inter vivos declaration by which trustees take title to  
property for the purpose of protecting or conserving it for the  
beneficiaries under the ordinary rules applied in chancery or  
probate courts.  
Revocable living trust. A revocable living trust is an  
arrangement created by a written agreement or declaration  
during the life of an individual and can be changed or ended  
at any time during the individual's life. A revocable living trust  
is generally created to manage and distribute property. Many  
people use this type of trust instead of (or in addition to) a  
will.  
IRD includes:  
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Instructions for Form 1041 (2023)  
                       
Because this type of trust is revocable, it is treated as a  
grantor type trust for tax purposes. See Grantor Type Trusts  
under Special Reporting Instructions, later, for special filing  
instructions that apply to grantor trusts.  
U.S. owner must generally file Form 3520-A, Annual  
Information Return of Foreign Trust With a U.S. Owner.  
If a domestic trust becomes a foreign trust, it is treated  
under section 684 as having transferred all of its assets to a  
foreign trust, except to the extent a grantor or another person  
is treated as the owner of the trust when the trust becomes a  
foreign trust.  
Be sure to read Optional Filing Methods for Certain  
Grantor Type Trusts, later. Generally, most people  
TIP  
that have revocable living trusts will be able to use  
Optional Method 1. This method is the easiest and least  
burdensome way to meet your obligations.  
Grantor Type Trusts  
If all or any portion of a trust is a grantor type trust, then that  
trust or portion of a trust must follow the special reporting  
requirements discussed later under Special Reporting  
Instructions. See Grantor Type Trust under Specific  
Instructions, later, for more details on what makes a trust a  
grantor type trust.  
Who Must File  
Decedent's Estate  
The fiduciary (or one of the joint fiduciaries) must file Form  
1041 for a domestic estate that has:  
1. Gross income for the tax year of $600 or more;  
2. A beneficiary who is a nonresident alien; or  
Note. A trust may be part grantor trust and part “other” type  
of trust, for example, simple or complex, or ESBT.  
3. If you held a qualified investment in a qualified  
opportunity fund (QOF) at any time during the year, you must  
file your return with Form 8997 attached. See the Form 8997  
instructions.  
Qualified subchapter S trusts (QSSTs). QSSTs must  
follow the special reporting requirements for these trusts,  
discussed later under Special Reporting Instructions.  
An estate is a domestic estate if it isn't a foreign estate. A  
foreign estate is one the income of which is from sources  
outside the United States that isn't effectively connected with  
the conduct of a U.S. trade or business and isn't includible in  
gross income. If you are the fiduciary of a foreign estate, file  
Form 1040-NR, U.S. Nonresident Alien Income Tax Return,  
instead of Form 1041.  
Special Rule for Certain Revocable Trusts  
Section 645 provides that if both the executor (if any) of an  
estate (the related estate) and the trustee of a qualified  
revocable trust (QRT) elect the treatment in section 645, the  
trust must be treated and taxed as part of the related estate  
during the election period. This election may be made by a  
QRT even if no executor is appointed for the related estate.  
Trust  
The fiduciary (or one of the joint fiduciaries) must file Form  
In general, Form 8855, Election To Treat a Qualified  
Revocable Trust as Part of an Estate, must be filed by the due  
date for Form 1041 for the first tax year of the related estate.  
This applies even if the combined related estate and electing  
trust don't have sufficient income to be required to file Form  
1041. However, if the estate is granted an extension of time  
to file Form 1041 for its first tax year, the due date for Form  
8855 is the extended due date.  
1041 for a domestic trust taxable under section 641 that has:  
1. Any taxable income for the tax year;  
2. Gross income of $600 or more (regardless of taxable  
income);  
3. A beneficiary who is a nonresident alien; or  
4. If you held a qualified investment in a QOF at any time  
during the year, you must file your return with Form 8997  
attached. See the Form 8997 instructions.  
Once made, the election is irrevocable.  
Qualified revocable trusts (QRTs). In general, a QRT is  
any trust (or part of a trust) that, on the day the decedent  
died, was treated as owned by the decedent because the  
decedent held the power to revoke the trust as described in  
section 676. An electing trust is a QRT for which a section  
645 election has been made.  
Two or more trusts are treated as one trust if the trusts  
have substantially the same grantor(s) and substantially the  
same primary beneficiary(ies) and a principal purpose of  
such trusts is avoidance of tax. This provision applies only to  
that portion of the trust that is attributable to contributions to  
corpus made after March 1, 1984.  
Election period. The election period is the period of time  
during which an electing trust is treated as part of its related  
estate.  
A trust is a domestic trust if:  
A U.S. court is able to exercise primary supervision over  
the administration of the trust (court test), and  
The election period begins on the date of the decedent's  
One or more U.S. persons have the authority to control all  
death and terminates on the earlier of:  
substantial decisions of the trust (control test).  
The day on which the electing trust and related estate, if  
See Regulations section 301.7701-7 for more information  
on the court and control tests.  
any, distribute all of their assets; or  
The day before the applicable date.  
To determine the applicable date, first determine whether a  
Form 706, United States Estate (and Generation-Skipping  
Transfer) Tax Return, is required to be filed as a result of the  
decedent's death. If no Form 706 is required to be filed, the  
applicable date is 2 years after the date of the decedent's  
death. If Form 706 is required, the applicable date is the later  
of 2 years after the date of the decedent's death or 6 months  
after the final determination of liability for estate tax. For  
additional information, see Regulations section 1.645-1(f).  
Also treated as a domestic trust is a trust (other than a  
trust treated as wholly owned by the grantor) that:  
Was in existence on August 20, 1996,  
Was treated as a domestic trust on August 19, 1996, and  
Elected to continue to be treated as a domestic trust.  
A trust that isn't a domestic trust is treated as a foreign  
trust. If you are the trustee of a foreign trust, file Form  
1040-NR instead of Form 1041. Also, a foreign trust with a  
5
Instructions for Form 1041 (2023)  
                         
under the name and TIN of the filing trustee's trust. A  
statement providing the same information about the electing  
trusts (except the filing trust) that is listed under If there is an  
executor above must be attached to these Forms 1041. All  
electing trusts must choose the same tax year.  
If there is more than one electing trust, the filing trustee is  
responsible for ensuring that the filing trust's share of the  
combined tax liability is paid.  
For additional information on filing requirements when  
there is no executor, including application of the separate  
share rule, see Regulations section 1.645-1(e). For  
information on the requirements when an executor is  
appointed after an election is made and the executor doesn't  
agree to the election, see later.  
Taxpayer identification number (TIN). All QRTs must  
obtain a new TIN following the death of the decedent whether  
or not a section 645 election is made. (Use Form W-9,  
Request for Taxpayer Identification Number and Certification,  
to notify payers of the new TIN.)  
An electing trust that continues after the termination of the  
election period doesn't need to obtain a new TIN following  
the termination unless:  
An executor was appointed and agreed to the election  
after the electing trust made a valid section 645 election, and  
the electing trust filed a return as an estate under the trust's  
TIN; or  
No executor was appointed and the QRT was the filing  
trust (as explained later).  
Responsibilities of the trustee when there is an  
executor (or there isn't an executor and the trustee isn't  
the filing trustee). When there is an executor (or there isn't  
an executor and the trustee isn't the filing trustee), the trustee  
of an electing trust is responsible for the following during the  
election period.  
A related estate that continues after the termination of the  
election period doesn't need to obtain a new TIN.  
For more information about TINs, including trusts with  
multiple owners, see Regulations sections 1.645-1 and  
301.6109-1(a).  
General procedures for completing Form 1041 during  
To timely provide the executor with all the trust information  
the election period.  
necessary to allow the executor to file a complete, accurate,  
and timely Form 1041.  
If there is an executor. The following rules apply to filing  
To ensure that the electing trust's share of the combined  
Form 1041 while the election is in effect.  
tax liability is paid.  
The executor of the related estate is responsible for filing  
Form 1041 for the estate and all electing trusts. The return is  
filed under the name and TIN of the related estate. Be sure to  
check the “Decedent's estate” box at the top of Form 1041  
and item G if the estate has made a section 645 election. The  
executor continues to file Form 1041 during the election  
period even if the estate distributes all of its assets before the  
end of the election period.  
The trustee does not file a Form 1041 during the election  
period (except for a final return if the trust terminates during  
the election period, as explained later).  
Procedure for completing Form 1041 for the year in  
which the election terminates.  
If there is an executor. If there is an executor, the Form  
1041 filed under the name and TIN of the related estate for  
the tax year in which the election terminates includes (a) the  
items of income, deduction, and credit for the related estate  
for its entire tax year; and (b) the income, deductions, and  
credits for the electing trust for the period that ends with the  
last day of the election period. If the estate won't continue  
after the close of the tax year, indicate that this Form 1041 is  
a final return.  
At the end of the last day of the election period, the  
combined entity is deemed to distribute the share comprising  
the electing trust to a new trust. All items of income, including  
net capital gains, that are attributable to the share comprising  
the electing trust are included in the calculation of DNI of the  
electing trust and treated as distributed. The distribution rules  
of sections 661 and 662 apply to this deemed distribution.  
The combined entity is entitled to an income distribution  
deduction for this deemed distribution, and the "new" trust  
must include its share of the distribution in its income. See  
Regulations sections 1.645-1(e)(2)(iii) and 1.645-1(h) for  
more information.  
The Form 1041 includes all items of income, deduction,  
and credit for the estate and all electing trusts.  
For item G, the executor must provide the TIN of the  
electing trust with the highest total asset value.  
The executor must attach a statement to Form 1041  
providing the following information for each electing trust  
(including the electing trust provided in item G): (a) the name  
of the electing trust, (b) the TIN of the electing trust, and (c)  
the name and address of the trustee of the electing trust.  
The related estate and the electing trust are treated as  
separate shares for purposes of computing DNI and applying  
distribution provisions. Also, each of those shares can  
contain two or more separate shares. For more information,  
see Separate share rule, later, and Regulations section  
1.645-1(e)(2)(iii).  
The executor is responsible for ensuring that the estate's  
share of the combined tax obligation is paid.  
For additional information, including treatment of transfers  
between shares and charitable contribution deductions, see  
Regulations section 1.645-1(e).  
If the electing trust continues in existence after the  
termination of the election period, the trustee must file Form  
1041 under the name and TIN of the trust, using the calendar  
year as its accounting period, if it is otherwise required to file.  
If there isn't an executor. If there isn't an executor, the  
following rules apply to filing Form 1041 for the tax year in  
which the election period ends.  
If there isn't an executor. If no executor has been  
appointed for the related estate, the trustee of the electing  
trust files Form 1041 as if it were an estate. File using the TIN  
that the QRT obtained after the death of the decedent. The  
trustee can choose a fiscal year as the trust's tax year during  
the election period. Be sure to check the “Decedent's estate”  
box at the top of Form 1041 and item G if the filing trust has  
made a section 645 election. For item G, the filing trustee  
must provide the TIN of the electing trust with the highest  
total asset value. The electing trust is entitled to a single $600  
personal exemption on returns filed for the election period.  
The tax year of the electing trust closes on the last day of  
the election period, and the Form 1041 filed for that tax year  
includes all items of income, deduction, and credit for the  
electing trust for the period beginning with the first day of the  
tax year and ending with the last day of the election period.  
If there is more than one electing trust, the trusts must  
The deemed distribution rules discussed above apply.  
appoint one trustee as the filing trustee. Form 1041 is filed  
6
Instructions for Form 1041 (2023)  
Check the box to indicate that this Form 1041 is a final  
If the election terminates as the result of a later appointed  
executor, the executor of the related estate must file Forms  
1041 under the name and TIN of the related estate for all tax  
years of the related estate beginning with the decedent's  
death. The electing trust's election period and tax year  
terminate the day before the appointment of the executor.  
The trustee isn't required to amend any of the returns filed by  
the electing trust for the period prior to the appointment of the  
executor. The trust must file a final Form 1041 following the  
instructions above for completing Form 1041 in the year in  
which the election terminates and there is no executor.  
Termination of the trust during the election period. If  
an electing trust terminates during the election period, the  
trustee of that trust must file a final Form 1041 by completing  
the entity information (using the trust's EIN), checking the  
Final return box, and signing and dating the form. Don't report  
items of income, deduction, and credit. These items are  
reported on the related estate's return.  
return.  
If the filing trust continues after the termination of the  
election period, the trustee must obtain a new TIN. If the trust  
meets the filing requirements, the trustee must file a Form  
1041 under the new TIN for the period beginning with the day  
after the close of the election period and, in general, ending  
December 31 of that year.  
Responsibilities of the trustee when there is an  
executor (or there isn't an executor and the trustee isn't  
the filing trustee). In addition to the requirements listed  
above under this same heading, the trustee is responsible for  
the following.  
If the trust will not continue after the close of the election  
period, the trustee must file a Form 1041 under the name and  
TIN of the trust. Complete the entity information and items A,  
C, D, and F. Indicate in item F that this is a final return. Don't  
report any items of income, deduction, or credit.  
If the trust will continue after the close of the election  
Alaska Native Settlement Trusts  
period, the trustee must file a Form 1041 for the trust for the  
tax year beginning the day after the close of the election  
period and, in general, ending December 31 of that year. Use  
the TIN obtained after the decedent's death. Follow the  
general rules for completing the return.  
The trustee of an Alaska Native Settlement Trust may elect  
the special tax treatment for the trust and its beneficiaries  
provided for in section 646. The election must be made by  
the due date (including extensions) for filing the trust's tax  
return for its first tax year ending after June 7, 2001. Don't  
use Form 1041. Use Form 1041-N, U.S. Income Tax Return  
for Electing Alaska Native Settlement Trusts, to make the  
election. Additionally, Form 1041-N is the trust's income tax  
return and satisfies the section 6039H information reporting  
requirement for the trust.  
Special filing instructions.  
When the election isn't made by the due date of the  
QRT's Form 1041. If the section 645 election hasn't been  
made by the time the QRT's first income tax return would be  
due for the tax year beginning with the decedent's death, but  
the trustee and executor (if any) have decided to make a  
section 645 election, then the QRT isn't required to file a  
Form 1041 for the short tax year beginning with the  
decedent's death and ending on December 31 of that year.  
However, if a valid election isn't subsequently made, the QRT  
may be subject to penalties and interest for failure to file and  
failure to pay.  
Bankruptcy Estate  
The bankruptcy trustee or debtor-in-possession must file  
Form 1041 for the estate of an individual involved in  
bankruptcy proceedings under chapter 7 or 11 of title 11 of  
the U.S. Code if the estate has gross income for the tax year  
of $13,850 or more. See Bankruptcy Estates, later, for  
details.  
If the QRT files a Form 1041 for this short period, and a  
valid section 645 election is subsequently made, then the  
trustee must file an amended Form 1041 for the electing  
trust, excluding all items of income, deduction, and credit of  
the electing trust. These amounts are then included on the  
first Form 1041 filed by the executor for the related estate (or  
the filing trustee for the electing trust filing as an estate).  
Later appointed executor. If an executor for the related  
estate isn't appointed until after the trustee has made a valid  
section 645 election, the executor must agree to the trustee's  
election and they must file a revised Form 8855 within 90  
days of the appointment of the executor. If the executor  
doesn't agree to the election, the election terminates as of  
the date of appointment of the executor.  
Charitable Remainder Trusts (CRTs)  
A section 664 CRT doesn’t file Form 1041. Instead, a CRT  
files Form 5227, Split-Interest Trust Information Return. If the  
CRT has any unrelated business taxable income, it must also  
file Form 4720, Return of Certain Excise Taxes Under  
Chapters 41 and 42 of the Internal Revenue Code.  
Common Trust Funds  
Don't file Form 1041 for a common trust fund maintained by a  
bank. Instead, the fund may use Form 1065, U.S. Return of  
Partnership Income, for its return. For more details, see  
section 584 and Regulations section 1.6032-1.  
If the executor agrees to the election, the trustee must  
amend any Form 1041 filed under the name and TIN of the  
electing trust for the period beginning with the decedent's  
death. The amended returns are still filed under the name  
and TIN of the electing trust, and they must include the items  
of income, deduction, and credit for the related estate for the  
periods covered by the returns. Also, attach a statement to  
the amended Forms 1041 identifying the name and TIN of  
the related estate, and the name and address of the executor.  
Check the “Final return” box on the amended return for the  
tax year that ends with the appointment of the executor.  
Except for this amended return, all returns filed for the  
combined entity after the appointment of the executor must  
be filed under the name and TIN of the related estate.  
ESBTs  
ESBTs file Form 1041. However, see Electing Small Business  
Trusts (ESBTs), later, for a discussion of the special reporting  
requirements for these trusts.  
Pooled Income Funds  
Pooled income funds file Form 1041. See Pooled Income  
Funds, later, for the special reporting requirements for these  
trusts. Additionally, pooled income funds must file Form 5227.  
Qualified Funeral Trusts  
Trustees of pre-need funeral trusts who elect treatment under  
section 685 file Form 1041-QFT, U.S. Income Tax Return for  
7
Instructions for Form 1041 (2023)  
           
Qualified Funeral Trusts. All other pre-need funeral trusts, see  
Grantor Type Trusts, later, for Form 1041 reporting  
requirements.  
Form 8879-F can only be associated with a single  
Form 1041. Form 8879-F can't be used with multiple  
Forms 1041.  
!
CAUTION  
Qualified Settlement Funds  
Form 1041 may also be e-filed using Form 8453-FE.  
The trustee of a designated or qualified settlement fund  
(QSF) must generally file Form 1120-SF, U.S. Income Tax  
Return for Settlement Funds, instead of Form 1041.  
For more information about e-filing returns through MeF,  
see Pub. 4164.  
If Form 1041 is e-filed and there is a balance due, the  
fiduciary may authorize an electronic funds withdrawal with  
the return.  
Special election. If a QSF has only one transferor, the  
transferor may elect to treat the QSF as a grantor type trust.  
To make the grantor trust election, the transferor must  
attach an election statement to a timely filed Form 1041,  
including extensions, that the administrator files for the QSF  
for the tax year in which the settlement fund is established. If  
Form 1041 isn't filed because Optional Method 1 or 2  
(described later) was chosen, attach the election statement  
to a timely filed income tax return, including extensions, of  
the transferor for the tax year in which the settlement fund is  
established.  
Private Delivery Services (PDSs)  
You can use certain PDSs designated by the IRS to meet the  
“timely mailing as timely filing/paying” rule for tax returns and  
payments. Go to IRS.gov/PDS for the current list of  
designated services.  
The PDS can tell you how to get written proof of the  
mailing date.  
Election statement. The election statement may be  
made separately or, if filed with Form 1041, on the  
attachment described under Grantor Type Trusts, later. At the  
top of the election statement, enter “Section 1.468B-1(k)  
Election” and include the transferor's:  
For the IRS mailing address to use if you’re using a PDS,  
PDSs can't deliver items to P.O. boxes. You must use  
the U.S. Postal Service to mail any item to an IRS  
!
CAUTION  
P.O. box address.  
Name,  
Address,  
TIN, and  
When To File  
A statement that they will treat the QSF as a grantor type  
For calendar year estates and trusts, file Form 1041 and  
Schedule(s) K-1 by April 15, 2024. If you live in Maine or  
Massachusetts, you have until April 17, 2024, because of the  
Patriots' Day and Emancipation Day holidays.  
trust.  
Widely Held Fixed Investment Trust (WHFITs)  
Trustees and middlemen of WHFITs don't file Form 1041.  
Instead, they report all items of gross income and proceeds  
on the appropriate Form 1099. For the definition of a WHFIT,  
see Regulations section 1.671-5(b)(22). A tax information  
statement that includes the information given to the IRS on  
Forms 1099, as well as additional information identified in  
Regulations section 1.671-5(e), must be given to trust  
interest holders. See the General Instructions for Certain  
Information Returns for more information.  
For fiscal year estates and trusts, file Form 1041 by the  
15th day of the 4th month following the close of the tax year.  
For example, an estate that has a tax year that ends on June  
30, 2024, must file Form 1041 by October 15, 2024. If the  
due date falls on a Saturday, Sunday, or legal holiday, file on  
the next business day.  
Extension of Time To File  
If more time is needed to file the estate or trust return, use  
Form 7004, Application for Automatic Extension of Time To  
File Certain Business Income Tax, Information, and Other  
Returns, to apply for an automatic 51/2-month extension of  
time to file.  
Electronic Filing  
Qualified fiduciaries or transmitters may be able to file Form  
1041 and related schedules electronically. To become an  
e-file provider, complete the following steps.  
1. Create an IRS e-Services account.  
2. Submit your e-file provider application online.  
3. Pass a suitability check.  
Period Covered  
File the 2023 return for calendar year 2023 and fiscal years  
beginning in 2023 and ending in 2024. If the return is for a  
fiscal year or a short tax year (less than 12 months), fill in the  
tax year space at the top of the form.  
The online application process takes 4–6 weeks to  
complete.  
The 2023 Form 1041 may also be used for a tax year  
beginning in 2024 if:  
Note. Existing e-file providers must now use e-Services to  
make account updates.  
1. The estate or trust has a tax year of less than 12  
Help is available online at e-services or through the e-Help  
Desk at 866-255-0654 (512-416-7750 for international calls),  
Monday through Friday, 6:30 a.m.–6:00 p.m. (Central time).  
to answer questions or to guide users through the application  
process.  
months that begins and ends in 2024, and  
2. The 2024 Form 1041 isn't available by the time the  
estate or trust is required to file its tax return. However, the  
estate or trust must show its 2024 tax year on the 2023 Form  
1041 and incorporate any tax law changes that are effective  
for tax years beginning after 2023.  
If you file Form 1041 electronically, you may sign the return  
electronically by using a personal identification number (PIN).  
See Form 8879-F for details.  
8
Instructions for Form 1041 (2023)  
             
Where To File  
For all estates and trusts, including charitable and split-interest trusts (other than CRTs).  
THEN use this address if you...  
IF you are located in...  
Are not enclosing a check or money order:  
Are enclosing a check or money order:  
Connecticut, Delaware, District of  
Columbia, Georgia, Illinois, Indiana,  
Kentucky, Maine, Maryland,  
Massachusetts, Michigan, New  
Department of the Treasury  
Department of the Treasury  
Hampshire, New Jersey, New York, North Internal Revenue Service  
Internal Revenue Service  
Carolina, Ohio, Pennsylvania, Rhode  
Island, South Carolina, Tennessee,  
Vermont, Virginia, West Virginia,  
Wisconsin  
Kansas City, MO 64999-0048  
Kansas City, MO 64999-0148  
Alabama, Alaska, Arizona, Arkansas,  
California, Colorado, Florida, Hawaii,  
Idaho, Iowa, Kansas, Louisiana,  
Minnesota, Mississippi, Missouri,  
Montana, Nebraska, Nevada, New  
Mexico, North Dakota, Oklahoma,  
Oregon, South Dakota, Texas, Utah,  
Washington, Wyoming  
Department of the Treasury  
Internal Revenue Service  
Ogden, UT 84201-0048  
Department of the Treasury  
Internal Revenue Service  
Ogden, UT 84201-0148  
A foreign country or U.S. territory  
Internal Revenue Service  
P.O. Box 409101  
Ogden, UT 84409  
Internal Revenue Service  
P.O. Box 409101  
Ogden, UT 84409  
appears in the Paid Preparer Use Only area of the estate's or  
trust's return. It doesn't apply to the firm, if any, shown in that  
section.  
If the “Yes” box is checked, the fiduciary is authorizing the  
IRS to call the paid preparer to answer any questions that  
may arise during the processing of the estate's or trust's  
return. The fiduciary is also authorizing the paid preparer to:  
Who Must Sign  
Fiduciary  
The fiduciary, or an authorized representative, must sign  
Form 1041. If there are joint fiduciaries, only one is required  
to sign the return.  
A financial institution that submitted estimated tax  
payments for trusts for which it is the trustee must enter its  
EIN in the space provided for the EIN of the fiduciary. Don't  
enter the EIN of the trust. For this purpose, a financial  
institution is one that maintains a Treasury Tax and Loan  
(TT&L) account. If you are an attorney or other individual  
functioning in a fiduciary capacity, leave this space blank.  
Don't enter your individual social security number (SSN).  
Give the IRS any information that is missing from the  
estate's or trust's return;  
Call the IRS for information about the processing of the  
estate's or trust's return or the status of its refund or  
payment(s); and  
Respond to certain IRS notices that the fiduciary has  
shared with the preparer about math errors, offsets, and  
return preparation. The notices won't be sent to the preparer.  
The fiduciary isn't authorizing the paid preparer to receive  
any refund check, bind the estate or trust to anything  
(including any additional tax liability), or otherwise represent  
the estate or trust before the IRS.  
The authorization will automatically end no later than the  
due date (without regard to extensions) for filing the estate's  
or trust's 2024 tax return. If the fiduciary wants to expand the  
paid preparer's authorization or revoke the authorization  
before it ends, see Pub. 947, Practice Before the IRS and  
Power of Attorney.  
Paid Preparer  
Generally, anyone who is paid to prepare a tax return must  
have a Preparer Tax Identification Number (PTIN), sign the  
return, and fill in the other blanks in the Paid Preparer Use  
Only area of the return.  
The person required to sign the return must:  
Complete the required preparer information including their  
PTIN,  
Sign it in the space provided for the preparer's signature (a  
facsimile signature is acceptable), and  
Accounting Methods  
Give you a copy of the return for your records.  
Figure taxable income using the method of accounting  
regularly used in keeping the estate's or trust's books and  
records. Generally, permissible methods include the cash  
method, the accrual method, or any other method authorized  
by the Internal Revenue Code. In all cases, the method used  
must clearly reflect income.  
If you, as fiduciary, fill in Form 1041, leave the Paid  
Preparer Use Only space blank.  
If someone prepares this return and doesn't charge you,  
that person should not sign the return.  
Paid Preparer Authorization  
Generally, the estate or trust may change its accounting  
method (for income as a whole or for any material item) only  
by getting consent on Form 3115, Application for Change in  
Accounting Method. For more information, see Pub. 538,  
Accounting Periods and Methods.  
If the fiduciary wants to allow the IRS to discuss the estate's  
or trust's 2023 tax return with the paid preparer who signed it,  
check the “Yes” box in the signature area of the return. This  
authorization applies only to the individual whose signature  
9
Instructions for Form 1041 (2023)  
             
3. A trust that was treated as owned by the decedent if  
the trust will receive the residue of the decedent's estate  
under the will (or, if no will is admitted to probate, is the trust  
primarily responsible for paying debts, taxes, and expenses  
of administration) for any tax year ending before the date that  
is 2 years after the decedent's death.  
Accounting Periods  
For a decedent's estate, the moment of death determines the  
end of the decedent's tax year and the beginning of the  
estate's tax year. As executor or administrator, you choose  
the estate's tax period when you file its first income tax return.  
The estate's first tax year may be any period of 12 months or  
less that ends on the last day of a month. If you select the last  
day of any month other than December, you are adopting a  
fiscal tax year.  
For more information, see Form 1041-ES, Estimated  
Income Tax for Estates and Trusts.  
Electronic Deposits  
To change the accounting period of an estate, use Form  
1128, Application To Adopt, Change, or Retain a Tax Year.  
A financial institution that has been designated as an  
authorized federal tax depository, and acts as a fiduciary for  
at least 200 taxable trusts that are required to pay estimated  
tax, is required to deposit the estimated tax payments  
electronically using the Electronic Federal Tax Payment  
System (EFTPS).  
Generally, a trust must adopt a calendar year. The  
following trusts are exempt from this requirement.  
A trust that is exempt from tax under section 501(a).  
A charitable trust described in section 4947(a)(1).  
A trust that is treated as wholly owned by a grantor under  
A fiduciary that isn't required to make electronic deposits  
of estimated tax on behalf of a trust or an estate may  
voluntarily participate in EFTPS. To enroll in or get more  
information about EFTPS, go to EFTPS.gov or call  
800-555-4477. To contact EFTPS using Telecommunications  
Relay Services (TRS) for people who are deaf, hard of  
hearing, or have a speech disability, dial 711 and then  
provide the TRS assistant the 800-555-4477 number above  
or 800-733-4829. Also, see Pub. 966, Electronic Federal Tax  
Payment System: A Guide to Getting Started.  
the rules of sections 671 through 679.  
Rounding Off to Whole Dollars  
You may round off cents to whole dollars on the estate's or  
trust's return and schedules. If you do round to whole dollars,  
you must round all amounts. To round, drop amounts under  
50 cents and increase amounts from 50 to 99 cents to the  
next dollar. For example, $1.39 becomes $1 and $2.50  
becomes $3.  
If you have to add two or more amounts to figure the  
amount to enter on a line, include cents when adding the  
amounts and round off only the total.  
Depositing on time. For a deposit using EFTPS to be on  
time, the deposit must be submitted by 8:00 p.m. Eastern  
time the day before the due date of the deposit.  
If you are entering amounts that include cents, make sure  
to include the decimal point. There is no cents column on the  
form.  
Section 643(g) Election  
Fiduciaries of trusts that pay estimated tax may elect under  
section 643(g) to have any portion of their estimated tax  
payments allocated to any of the beneficiaries.  
Estimated Tax  
Generally, an estate or trust must pay estimated income tax  
for 2024 if it expects to owe, after subtracting any withholding  
and credits, at least $1,000 in tax, and it expects the  
withholding and credits to be less than the smaller of:  
The fiduciary of a decedent's estate may make a section  
643(g) election only for the final year of the estate.  
Make the election by filing Form 1041-T, Allocation of  
Estimated Tax Payments to Beneficiaries, by the 65th day  
after the close of the estate's or trust's tax year. Then, include  
that amount in box 13, code A, of Schedule K-1 (Form 1041)  
for any beneficiaries for whom it was elected.  
1. 90% of the tax shown on the 2024 tax return (662/3% of  
the tax if the estate or trust qualifies as a farmer or  
fisherman); or  
2. 100% of the tax shown on the 2023 tax return (110%  
of that amount if the estate's or trust's AGI on that return is  
more than $150,000, and less than 2/3 of gross income for  
2023 and 2024 is from farming or fishing).  
If Form 1041-T was timely filed, the payments are treated  
as paid or credited to the beneficiary on the last day of the tax  
year and must be included as an other amount paid, credited,  
or required to be distributed on Form 1041, Schedule B,  
line 10. See the instructions for Schedule B, line 10, later.  
However, if a return was not filed for 2023 or that return  
didn't cover a full 12 months, item 2 doesn't apply.  
Failure to make a timely election will result in the estimated  
tax payments not being transferred to the beneficiary(ies)  
even if you entered the amount on Schedule K-1.  
For this purpose, include household employment taxes in  
the tax shown on the tax return, but only if either of the  
following is true.  
See the instructions for Schedule G, Part II, line 11, for  
more details.  
The estate or trust will have federal income tax withheld for  
2024 (see the instructions for Schedule G, Part II, line 14).  
The estate or trust would be required to make estimated  
Interest and Penalties  
tax payments for 2024 even if it didn't include household  
employment taxes when figuring estimated tax.  
Interest  
Exceptions  
Estimated tax payments aren't required from:  
Interest is charged on taxes not paid by the due date, even if  
an extension of time to file is granted.  
1. An estate of a domestic decedent or a domestic trust  
Interest is also charged on penalties imposed for failure to  
file, negligence, fraud, substantial valuation misstatements,  
substantial understatements of tax, and reportable  
that had no tax liability for the full 12-month 2023 tax year;  
2. A decedent's estate for any tax year ending before the  
date that is 2 years after the decedent's death; or  
transaction understatements. Interest is charged on the  
10  
Instructions for Form 1041 (2023)  
               
penalty from the due date of the return (including extensions).  
The interest charge is figured at a rate determined under  
section 6621.  
have been responsible for collecting, accounting for, or  
paying over these taxes, and who acted willfully in not doing  
so. The penalty is equal to the unpaid trust fund tax. See the  
Instructions for Form 720; Pub. 15 (Circular E), Employer's  
Tax Guide; or Pub. 51 (Circular A), Agricultural Employer's  
Tax Guide, for more details, including the definition of  
responsible persons.  
Late Filing of Return  
The law provides a penalty of 5% of the tax due for each  
month, or part of a month, for which a return isn't filed up to a  
maximum of 25% of the tax due (15% for each month, or part  
of a month, up to a maximum of 75% if the failure to file is  
fraudulent). If the return is more than 60 days late, the  
minimum penalty is the smaller of $485 or the tax due.  
Other Penalties  
Other penalties can be imposed for negligence, substantial  
understatement of tax, and fraud. See Pub. 17, Your Federal  
Income Tax, for details on these penalties.  
The penalty won't be imposed if you can show that the  
failure to file on time was due to reasonable cause. If you  
receive a notice about penalty and interest after you file this  
return, send us an explanation and we will determine if you  
meet reasonable-cause criteria. Don't attach an explanation  
when you file Form 1041.  
Other Forms That May Be Required  
Form W-2, Wage and Tax Statement, and Form W-3,  
Transmittal of Wage and Tax Statements.  
Form 56, Notice Concerning Fiduciary Relationship. You  
must notify the IRS of the creation or termination of a  
fiduciary relationship. You may use Form 56 to provide this  
notice to the IRS.  
Late Payment of Tax  
Generally, the penalty for not paying tax when due is 1/2 of 1%  
of the unpaid amount for each month or part of a month it  
remains unpaid. The maximum penalty is 25% of the unpaid  
amount. The penalty applies to any unpaid tax on the return.  
Any penalty is in addition to interest charges on late  
payments.  
Form 461, Limitation on Business Losses.  
Form 706, United States Estate (and Generation-Skipping  
Transfer) Tax Return; or Form 706-NA, United States Estate  
(and Generation-Skipping Transfer) Tax Return, Estate of  
nonresident not a citizen of the United States.  
If you include interest on either of these penalties  
Form 706-GS(D), Generation-Skipping Transfer Tax  
Return for Distributions.  
with your payment, identify and enter these amounts  
in the bottom margin of Form 1041, page 1. Don't  
TIP  
include the interest or penalty amount in the balance of tax  
due on line 28.  
Form 706-GS(D-1), Notification of Distribution From a  
Generation-Skipping Trust.  
Form 706-GS(T), Generation-Skipping Transfer Tax  
Return for Terminations.  
Failure To Provide Information Timely  
You must provide Schedule K-1 (Form 1041), on or before  
the day you are required to file Form 1041, to each  
beneficiary who receives a distribution of property or an  
allocation of an item of the estate.  
Form 709, United States Gift (and Generation-Skipping  
Transfer) Tax Return.  
Form 720, Quarterly Federal Excise Tax Return. Use Form  
720 to report environmental excise taxes, communications  
and air transportation taxes, fuel taxes, luxury tax on  
passenger vehicles, manufacturers' taxes, ship passenger  
tax, and certain other excise taxes.  
For each failure to provide Schedule K-1 to a beneficiary  
when due and each failure to include on Schedule K-1 all the  
information required to be shown (or the inclusion of incorrect  
information), a $310 penalty may be imposed with regard to  
each Schedule K-1 for which a failure occurs. The maximum  
penalty is $3,783,000 for all such failures during a calendar  
year. If the requirement to report information is intentionally  
disregarded, each $310 penalty is increased to $630 or, if  
greater, 10% of the aggregate amount of items required to be  
reported, and no maximum penalty applies.  
See Trust Fund Recovery Penalty, earlier.  
!
CAUTION  
Form 926, Return by a U.S. Transferor of Property to a  
Foreign Corporation. Use this form to report certain  
information required under section 6038B.  
The penalty won't be imposed if the fiduciary can show  
that not providing information timely and correctly was due to  
reasonable cause and not due to willful neglect.  
Form 940, Employer's Annual Federal Unemployment  
(FUTA) Tax Return. The estate or trust may be liable for FUTA  
tax and may have to file Form 940 if it paid wages of $1,500  
or more in any calendar quarter during the calendar year (or  
the preceding calendar year) or one or more employees  
worked for the estate or trust for some part of a day in any 20  
different weeks during the calendar year (or the preceding  
calendar year).  
Underpaid Estimated Tax  
If the fiduciary underpaid estimated tax, use Form 2210,  
Underpayment of Estimated Tax by Individuals, Estates, and  
Trusts, to figure any penalty. Enter the amount of any penalty  
on Form 1041, line 27.  
Form 941, Employer's QUARTERLY Federal Tax Return.  
Employers must file this form quarterly to report income tax  
withheld on wages and employer and employee social  
security and Medicare taxes. Certain small employers must  
file Form 944, Employer's ANNUAL Federal Tax Return,  
instead of Form 941. For more information, see the  
Trust Fund Recovery Penalty  
This penalty may apply if certain excise, income, social  
security, and Medicare taxes that must be collected or  
withheld aren't collected or withheld, or these taxes aren't  
paid. These taxes are generally reported on Forms 720, 941,  
943, 944, or 945. The trust fund recovery penalty may be  
imposed on all persons who are determined by the IRS to  
Instructions for Form 944. Agricultural employers must file  
Form 943, Employer's Annual Federal Tax Return for  
11  
Instructions for Form 1041 (2023)  
             
Agricultural Employees, instead of Form 941, to report  
income tax withheld and employer and employee social  
security and Medicare taxes on farmworkers.  
Form 8275-R, Regulation Disclosure Statement, is used to  
disclose any item on a tax return for which a position has  
been taken that is contrary to Treasury regulations.  
See Trust Fund Recovery Penalty, earlier.  
Form 8288, U.S. Withholding Tax Return for Certain  
Dispositions by Foreign Persons; and Form 8288-A,  
Statement of Withholding on Certain Dispositions by Foreign  
Persons. Use these forms to report and transmit withheld tax  
on the sale of U.S. real property by a foreign person. Also,  
use these forms to report and transmit tax withheld from  
amounts distributed to a foreign beneficiary from a “U.S. real  
property interest account” that a domestic estate or trust is  
required to establish under Regulations section 1.1445-5(c)  
(1)(iii).  
Form 8300, Report of Cash Payments Over $10,000  
Received in a Trade or Business. Generally, this form is used  
to report the receipt of more than $10,000 in cash or foreign  
currency in one transaction (or a series of related  
transactions).  
!
CAUTION  
Form 945, Annual Return of Withheld Federal Income Tax.  
Use this form to report income tax withheld from nonpayroll  
payments, including pensions, annuities, IRAs, gambling  
winnings, and backup withholding.  
See Trust Fund Recovery Penalty, earlier.  
!
CAUTION  
Form 965-A, Individual Report of Net 965 Tax Liability.  
Form 982, Reduction of Tax Attributes Due to Discharge of  
Indebtedness (and Section 1082 Basis Adjustment).  
Form 1040, U.S. Individual Income Tax Return.  
Form 8855, Election To Treat a Qualified Revocable Trust  
as Part of an Estate. This election allows a QRT to be treated  
and taxed (for income tax purposes) as part of its related  
estate during the election period.  
Form 8865, Return of U.S. Persons With Respect to  
Certain Foreign Partnerships. The estate or trust may have to  
file Form 8865 if it:  
Form 1040-NR, U.S. Nonresident Alien Income Tax  
Return.  
Form 1040-SR, U.S. Tax Return for Seniors.  
Form 1041-A, U.S. Information Return Trust Accumulation  
of Charitable Amounts.  
1. Controlled a foreign partnership (that is, owned more  
Form 1042, Annual Withholding Tax Return for U.S.  
Source Income of Foreign Persons; and Form 1042-S,  
Foreign Person's U.S. Source Income Subject to Withholding.  
Use these forms to report and transmit withheld tax on  
payments or distributions made to nonresident alien  
individuals, foreign partnerships, or foreign corporations to  
the extent such payments or distributions constitute gross  
income from sources within the United States that isn't  
effectively connected with a U.S. trade or business. For more  
information, see sections 1441 and 1442, and Pub. 515,  
Withholding of Tax on Nonresident Aliens and Foreign  
Entities.  
than a 50% direct or indirect interest in a foreign partnership);  
2. Owned at least a 10% direct or indirect interest in a  
foreign partnership while U.S. persons controlled that  
partnership;  
3. Had an acquisition, disposition, or change in  
proportional interest in a foreign partnership that:  
a. Increased its direct interest to at least 10%,  
b. Reduced its direct interest of at least 10% to less than  
10%, or  
c. Changed its direct interest by at least a 10% interest;  
or  
Forms 1099-A, B, INT, LTC, MISC, NEC, OID, Q, R, S, and  
SA. You may have to file these information returns to report  
acquisitions or abandonments of secured property; proceeds  
from broker and barter exchange transactions; interest  
payments; payments of long-term care and accelerated  
death benefits; miscellaneous income payments;  
4. Contributed property to a foreign partnership in  
exchange for a partnership interest if:  
a. Immediately after the contribution, the estate or trust  
owned, directly or indirectly, at least a 10% interest in the  
foreign partnership; or  
b. The fair market value (FMV) of the property the estate  
or trust contributed to the foreign partnership, for a  
partnership interest, when added to other contributions of  
property made to the foreign partnership during the  
preceding 12-month period, exceeds $100,000.  
nonemployee compensation; original issue discount;  
distributions from Coverdell ESAs; distributions from  
pensions, annuities, retirement or profit-sharing plans, IRAs  
(including SEPs, SIMPLEs, Roth IRAs, Roth Conversions,  
and IRA recharacterizations), insurance contracts, etc.;  
proceeds from real estate transactions; and distributions from  
an HSA, Archer MSA, or Medicare Advantage MSA.  
Also, the estate or trust may have to file Form 8865 to  
report certain dispositions by a foreign partnership of  
property it previously contributed to that foreign partnership if  
it was a partner at the time of the disposition.  
For more details, including penalties for failing to file Form  
8865, see Form 8865 and its separate instructions.  
Also, use certain of these returns to report amounts  
received as a nominee on behalf of another person, except  
amounts reported to beneficiaries on Schedule K-1 (Form  
1041).  
Form 8275, Disclosure Statement. File Form 8275 to  
disclose items or positions, except those contrary to a  
regulation, that are not otherwise adequately disclosed on a  
tax return. The disclosure is made to avoid parts of the  
accuracy-related penalty imposed for disregard of rules or  
substantial understatement of tax. Form 8275 is also used for  
disclosures relating to preparer penalties for  
Form 8886, Reportable Transaction Disclosure Statement.  
Use Form 8886 to disclose information for each reportable  
transaction in which the trust participated, directly or  
indirectly. Form 8886 must be filed for each tax year that the  
federal income tax liability of the estate or trust is affected by  
its participation in the transaction. The estate or trust may  
have to pay a penalty if it has a requirement to file Form 8886  
but you fail to file it. The following are reportable transactions.  
understatements due to unrealistic positions or disregard of  
rules.  
12  
Instructions for Form 1041 (2023)  
 
Any transaction that is the same as or substantially similar  
1. Schedule I (Form 1041).  
2. Form 4952.  
3. Schedule H (Form 1040).  
4. Schedule D (Form 1041).  
5. Form 8949.  
6. Form 8995 or Form 8995-A.  
7. Form 4136.  
8. Form 8978.  
9. Form 965-A.  
10. Form 8941.  
11. Form 3800.  
12. Form 8997.  
to tax avoidance transactions identified by the IRS as listed  
transactions.  
Any transaction offered under conditions of confidentiality  
and for which the estate or trust paid a minimum fee  
(confidential transaction).  
Any transaction for which the estate or trust or a related  
party has contractual protection against disallowance of the  
tax benefits (transaction with contractual protection).  
Any transaction resulting in a loss of at least $2 million in  
any single year or $4 million in any combination of years  
($50,000 in any single year if the loss is generated by a  
section 988 transaction) (loss transactions).  
Any transaction substantially similar to one of the types of  
transactions identified by the IRS as a transaction of interest.  
13. Form 8960.  
See the Instructions for Form 8886 for more details and  
exceptions.  
14. Schedule A (Form 8936).  
15. Additional schedules in alphabetical order.  
16. Additional forms in numerical order.  
17. All other attachments.  
Form 8918, Material Advisor Disclosure Statement.  
Material advisors who provide material aid, assistance, or  
advice on organizing, managing, promoting, selling,  
implementing, insuring, or carrying out any reportable  
transaction, and who directly or indirectly receive or expect to  
receive a minimum fee, must use Form 8918 to disclose any  
reportable transaction under Regulations section  
301.6111-3. For more information, see Form 8918 and its  
instructions.  
Attachments  
If you need more space on the forms or schedules, attach  
separate sheets. Use the same size and format as on the  
printed forms. But show the totals on the printed forms.  
Attach these separate sheets after all the schedules and  
forms. Enter the estate's or trust's EIN on each sheet.  
Form 8938, Statement of Specified Foreign Financial  
Assets.  
Form 8960, Net Investment Income Tax—Individuals,  
Estates, and Trusts.  
Don't file a copy of the decedent's will or the trust  
instrument unless the IRS requests it.  
Form 8971, Information Regarding Beneficiaries Acquiring  
Property From a Decedent.  
Form 8975, Country-by-Country Report.  
Schedule A (Form 8975), Tax Jurisdiction and Constituent  
Entity Information.  
Form 8978, Partner's Additional Reporting Year Tax.  
Form 8990, Limitation on Business Interest Expense  
Under Section 163(j).  
Form 8992, U.S. Shareholder Calculation of Global  
Intangible Low-Taxed Income (GILTI).  
Special Reporting Instructions  
Grantor type trusts, the S portion of ESBTs, and bankruptcy  
estates all have reporting requirements that are significantly  
different than other subchapter J trusts and decedents’  
estates. Additionally, grantor type trusts have optional filing  
methods available. Pooled income funds have many similar  
reporting requirements that other subchapter J trusts (other  
than grantor type trusts and ESBTs) have but there are some  
very important differences. These reporting differences and  
optional filing methods are discussed below by entity.  
Form 8995, Qualified Business Income Deduction  
Simplified Computation.  
Form 8995-A, Qualified Business Income Deduction.  
Form 8997, Initial and Annual Statement of Qualified  
Opportunity Fund (QOF) Investments.  
Grantor Type Trusts  
A trust is a grantor trust if the grantor retains certain powers  
or ownership benefits. This can also apply to only a portion of  
a trust. See Grantor Type Trust, later, for details on what  
makes a trust a grantor trust.  
In general, a grantor trust is ignored for income tax  
purposes and all of the income, deductions, etc., are treated  
as belonging directly to the grantor. This also applies to any  
portion of a trust that is treated as a grantor trust.  
Additional Information  
The following publications may assist you in preparing Form  
1041.  
Pub. 550, Investment Income and Expenses.  
Pub. 559, Survivors, Executors, and Administrators.  
Pub. 590-A, Contributions to Individual Retirement  
Note. If only a portion of the trust is a grantor type trust,  
indicate both grantor trust and the other type of trust, for  
example, simple or complex trust, as the type of entities  
checked in Section A on page 1 of Form 1041.  
Arrangements (IRAs).  
Pub. 590-B, Distributions from Individual Retirement  
Arrangements (IRAs).  
The following instructions apply only to grantor type  
Pub. 4895, Tax Treatment of Property Acquired From a  
trusts that are not using an optional filing method.  
!
Decedent Dying in 2010.  
CAUTION  
Assembly and Attachments  
How to report. If the entire trust is a grantor trust, fill in only  
the entity information of Form 1041. Don't show any dollar  
amounts on the form itself; show dollar amounts only on an  
Assemble any schedules, forms, and attachments behind  
Form 1041 in the following order.  
13  
Instructions for Form 1041 (2023)  
           
attachment to the form. Don't use Schedule K-1 (Form 1041)  
as the attachment.  
All of the trust is treated as owned by the spouses, and  
The spouses file their income tax return jointly for that tax  
year.  
If only part of the trust is a grantor type trust, the portion of  
the income, deductions, etc., that is allocable to the  
non-grantor part of the trust is reported on Form 1041, under  
normal reporting rules. The amounts that are allocable  
directly to the grantor are shown only on an attachment to the  
form. Don't use Schedule K-1 (Form 1041) as the  
Generally, if a trust is treated as owned by two or more  
grantors or other persons, the trustee may choose Optional  
Method 3 as the trust's method of reporting instead of filing  
Form 1041.  
attachment. However, Schedule K-1 is used to reflect any  
income distributed from the portion of the trust that isn't  
taxable directly to the grantor or owner.  
Once you choose the trust's filing method, you must follow  
the rules under Changing filing methods, later, if you want to  
change to another method.  
The fiduciary must give the grantor (owner) of the trust a  
copy of the attachment.  
Exceptions. The following trusts can't report using the  
Attachment. On the attachment, show:  
optional filing methods.  
The name, identifying number, and address of the  
A common trust fund (as defined in section 584(a)).  
A foreign trust or a trust that has any of its assets located  
person(s) to whom the income is taxable;  
The income of the trust that is taxable to the grantor or  
outside the United States.  
another person under sections 671 through 678—report the  
income in the same detail as it would be reported on the  
grantor's return had it been received directly by the grantor;  
and  
A QSST (as defined in section 1361(d)(3)).  
A trust all of which is treated as owned by one grantor or  
one other person whose tax year is other than a calendar  
year.  
Any deductions, credits, or elections that apply to this  
A trust all of which is treated as owned by one or more  
income. Report these deductions and credits in the same  
detail as they would be reported on the grantor's return had  
they been received directly by the grantor.  
grantors or other persons, one of which isn't a U.S. person.  
A trust all of which is treated as owned by one or more  
grantors or other persons if at least one grantor or other  
person is an exempt recipient for information reporting  
purposes, unless at least one grantor or other person isn't an  
exempt recipient and the trustee reports without treating any  
of the grantors or other persons as exempt recipients.  
The income taxable to the grantor or another person under  
sections 671 through 678 and the deductions and credits that  
apply to that income must be reported by that person on their  
own income tax return.  
Optional Method 1. For a trust treated as owned by one  
grantor or by one other person, the trustee must give all  
payers of income during the tax year the name and TIN of the  
grantor or other person treated as the owner of the trust and  
the address of the trust. This method may be used only if the  
owner of the trust provides the trustee with a signed Form  
W-9. In addition, unless the grantor or other person treated  
as owner of the trust is the trustee or a co-trustee of the trust,  
the trustee must give the grantor or other person treated as  
owner of the trust a statement that:  
Example. The John Doe Trust is a grantor type trust.  
During the year, the trust sold 100 shares of ABC stock for  
$1,010 in which it had a basis of $10 and 200 shares of XYZ  
stock for $10 in which it had a $1,020 basis.  
The trust doesn't report these transactions on Form 1041.  
Instead, a schedule is attached to the Form 1041 showing  
each stock transaction separately and in the same detail as  
John Doe (grantor and owner) will need to report these  
transactions on his Form 8949, Sales and Other Dispositions  
of Capital Assets; and Schedule D (Form 1040). The trust  
doesn't net the capital gains and losses, nor does it issue  
John Doe a Schedule K-1 (Form 1041) showing a $10  
long-term capital loss.  
QSSTs. Income allocated to S corporation stock held by the  
trust is treated as owned by the income beneficiary of the  
portion of the trust that owns the stock. Report this income  
following the rules discussed above for grantor type trusts. A  
QSST can't elect any of the optional filing methods discussed  
below.  
However, the trust, and not the income beneficiary, is  
treated as the owner of the S corporation stock for figuring  
and attributing the tax results of a disposition of the stock. For  
example, if the disposition is a sale, the QSST election ends  
as to the stock sold, and any gain or loss recognized on the  
sale will be that of the trust. For more information on QSSTs,  
see Regulations section 1.1361-1(j).  
Shows all items of income, deduction, and credit of the  
trust;  
Identifies the payer of each item of income;  
Explains how the grantor or other person treated as owner  
of the trust takes those items into account when figuring the  
grantor's or other person's taxable income or tax; and  
Informs the grantor or other person treated as the owner of  
the trust that those items must be included when figuring  
taxable income and credits on their income tax return.  
Grantor trusts that haven't applied for an EIN and are  
going to file under Optional Method 1 don't need an  
TIP  
EIN for the trust as long as they continue to report  
under that method.  
Optional Method 2. For a trust treated as owned by one  
grantor or by one other person, the trustee must give all  
payers of income during the tax year the name, address, and  
TIN of the trust. The trustee must also file with the IRS the  
appropriate Forms 1099 to report the income or gross  
proceeds paid to the trust during the tax year that show the  
trust as the payer and the grantor, or other person treated as  
owner, as the payee. The trustee must report each type of  
income in the aggregate and each item of gross proceeds  
separately. The due date for any Forms 1099 required to be  
filed with the IRS by a trustee under this method is February  
28, 2024 (March 31, 2024, if filed electronically).  
Optional Filing Methods for Certain Grantor Type  
Trusts  
Generally, if a trust is treated as owned by one grantor or  
other person, the trustee may choose Optional Method 1 or  
Optional Method 2 as the trust's method of reporting instead  
of filing Form 1041. Spouses will be treated as one grantor for  
purposes of these two optional methods if:  
14  
Instructions for Form 1041 (2023)  
   
In addition, unless the grantor, or other person treated as  
owner of the trust, is the trustee or a co-trustee of the trust,  
the trustee must give the grantor or other person treated as  
owner of the trust a statement that:  
For more information, see section 3406 and its  
regulations.  
Pooled Income Funds  
If you are filing for a pooled income fund, attach a statement  
to support the following.  
Shows all items of income, deduction, and credit of the  
trust;  
Explains how the grantor or other person treated as owner  
The calculation of the yearly rate of return.  
of the trust takes those items into account when figuring the  
grantor's or other person's taxable income or tax; and  
The computation of the deduction for distributions to the  
beneficiaries.  
Informs the grantor or other person treated as the owner of  
The computation of any charitable deduction.  
the trust that those items must be included when figuring  
taxable income and credits on their income tax return. This  
statement satisfies the requirement to give the recipient  
copies of the Forms 1099 filed by the trustee.  
See section 642 and the regulations thereunder for more  
information.  
You don't have to complete Schedule A or B of Form 1041.  
Optional Method 3. For a trust treated as owned by two or  
more grantors or other persons, the trustee must give all  
payers of income during the tax year the name, address, and  
TIN of the trust. The trustee must also file with the IRS the  
appropriate Forms 1099 to report the income or gross  
proceeds paid to the trust by all payers during the tax year  
attributable to the part of the trust treated as owned by each  
grantor, or other person, showing the trust as the payer and  
each grantor, or other person treated as owner of the trust, as  
the payee. The trustee must report each type of income in the  
aggregate and each item of gross proceeds separately. The  
due date for any Forms 1099 required to be filed with the IRS  
by a trustee under this method is February 28, 2024 (March  
31, 2024, if filed electronically).  
Also, you must file Form 5227 for the pooled income fund.  
However, if all amounts were transferred in trust before May  
27, 1969, or if an amount was transferred to the trust after  
May 26, 1969, for which no deduction was allowed under any  
of the sections listed under section 4947(a)(2), then Form  
5227 does not have to be filed.  
Note. Form 1041-A is no longer filed by pooled income  
funds.  
Electing Small Business Trusts (ESBTs)  
Special rules apply when figuring the tax on the S portion of  
an ESBT. The S portion of an ESBT is the portion of the trust  
that consists of stock in one or more S corporations and isn't  
treated as a grantor type trust. The tax on the S portion:  
In addition, the trustee must give each grantor or other  
Must be figured separately from the tax on the remainder  
person treated as owner of the trust a statement that:  
of the ESBT (if any) and attached to the return; and  
Shows all items of income, deduction, and credit of the  
Is entered on Schedule G, Part I, line 4.  
trust attributable to the part of the trust treated as owned by  
the grantor or other person;  
The tax on the remainder (non-S portion) of the ESBT is  
Explains how the grantor or other person treated as owner  
figured in the normal manner on Form 1041.  
of the trust takes those items into account when figuring the  
grantor's or other person's taxable income or tax; and  
Tax computation attachment. Attach to the return the tax  
computation for the S portion of the ESBT.  
Informs the grantor or other person treated as the owner of  
the trust that those items must be included when figuring  
taxable income and credits on their income tax return. This  
statement satisfies the requirement to give the recipient  
copies of the Forms 1099 filed by the trustee.  
If you need to complete and attach a tax form or  
worksheet for the S portion of the trust, enter “ESBT” in the  
top margin of the tax form, worksheet, or attachment.  
To compute the tax on the S portion:  
Changing filing methods. A trustee who previously had  
filed Form 1041 can change to one of the optional methods  
by filing a final Form 1041 for the tax year that immediately  
precedes the first tax year for which the trustee elects to  
report under one of the optional methods. On the front of the  
final Form 1041, the trustee must enter “Pursuant to section  
1.671-4(g), this is the final Form 1041 for this grantor trust,”  
and check the Final return box in item F.  
Treat that portion of the ESBT as if it were a separate trust;  
Include only the income, losses, deductions, and credits  
allocated to the ESBT as an S corporation shareholder and  
gain or loss from the disposition of S corporation stock;  
Aggregate items of income, losses, deductions, and  
credits allocated to the ESBT as an S corporation  
shareholder if the S portion of the ESBT has stock in more  
than one S corporation;  
Deduct state and local income taxes directly related to the  
For more details on changing reporting methods, including  
changes from one optional method to another, see  
Regulations section 1.671-4(g).  
S portion or allocated to the S portion if the allocation is  
reasonable in light of all the circumstances and  
administrative expenses that wouldn't have been incurred if  
the S corporation shares were not held by the trust;  
Backup withholding. The following grantor trusts are  
treated as payors for purposes of backup withholding.  
Deduct interest expense paid or accrued on indebtedness  
1. A trust established after 1995, all of which is owned by  
two or more grantors (treating spouses filing a joint return as  
one grantor).  
incurred to acquire stock in an S corporation; and  
Deduct charitable contributions attributable to the S  
portion. See Pub. 526 to figure the amount of the deduction if  
either of the following apply.  
2. A trust with 10 or more grantors established after 1983  
but before 1996.  
1. Cash contributions or contributions of ordinary income  
property are more than 30% of the AGI of the S portion.  
The trustee must withhold a certain percentage of  
reportable payments made to any grantor who is subject to  
backup withholding.  
2. Gifts of capital gain property are more than 20% of the  
AGI of the S portion.  
Don't claim a deduction for capital losses in excess of  
capital gains;  
15  
Instructions for Form 1041 (2023)  
             
Don't claim an income distribution deduction or an  
Accounting Period  
exemption amount;  
Don't claim an exemption amount in figuring the alternative  
A bankruptcy estate is allowed to have a fiscal year. However,  
this period can't be longer than 12 months.  
minimum tax (AMT); and  
Don't use the tax rate schedule to figure the tax. The tax is  
37% of the S portion's taxable income except in figuring the  
maximum tax on qualified dividends and capital gains.  
When To File  
For additional information, see Regulations section  
File Form 1041 on or before the 15th day of the 4th month  
following the close of the tax year. Use Form 7004 to apply for  
an automatic 6-month extension of time to file.  
1.641(c)-1.  
Other information. When figuring the tax and DNI on the  
remaining (non-S) portion of the trust, disregard the S  
corporation items.  
Disclosure of Return Information  
Don't apportion to the beneficiaries any of the S  
Under section 6103(e)(5), tax returns of individual debtors  
who have filed for bankruptcy under chapter 7 or 11 of title 11  
are, upon written request, open to inspection by or disclosure  
to the trustee.  
corporation items.  
If the ESBT consists entirely of stock in one or more S  
corporations, don't make any entries on lines 1–23  
of page 1. Instead:  
Complete the entity portion;  
The returns subject to disclosure to the trustee are those  
for the year the bankruptcy begins and prior years. Use Form  
4506, Request for Copy of Tax Return, to request copies of  
the individual debtor's tax returns.  
Follow the instructions above for figuring the tax on the S  
corporation items;  
Enter the ESBT tax on Schedule G, Part I, line 4;  
Carry the Total tax from line 9 of Schedule G, Part I, to  
line 24 on page 1; and  
If the bankruptcy case wasn't voluntary, disclosure can't be  
made before the bankruptcy court has entered an order for  
relief, unless the court rules that the disclosure is needed for  
determining whether relief should be ordered.  
Complete the rest of the return.  
The grantor portion (if any) of an ESBT will follow the rules  
discussed under Grantor Type Trusts, earlier.  
Bankruptcy Estates  
Transfer of Tax Attributes From the Individual  
Debtor to the Bankruptcy Estate  
The bankruptcy estate that is created when an individual  
debtor files a petition under either chapter 7 or 11 of title 11 of  
the U.S. Code is treated as a separate taxable entity. The  
bankruptcy estate is administered by a trustee or a  
debtor-in-possession. If the case is later dismissed by the  
bankruptcy court, the individual debtor is treated as if the  
bankruptcy petition had never been filed.  
The bankruptcy estate succeeds to the following tax  
attributes of the individual debtor.  
1. NOL carryovers.  
2. Charitable contribution carryovers.  
3. Recovery of tax benefit items.  
4. Credit carryovers.  
A separate taxable entity isn't created if a partnership or  
corporation files a petition under any chapter of title 11 of the  
U.S. Code.  
5. Capital loss carryovers.  
6. Basis, holding period, and character of assets.  
7. Method of accounting.  
For additional information about bankruptcy estates, see  
Pub. 908, Bankruptcy Tax Guide.  
8. Unused passive activity losses.  
9. Unused passive activity credits.  
10. Unused section 465 losses.  
Who Must File  
Every trustee (or debtor-in-possession) for an individual's  
bankruptcy estate under chapter 7 or 11 of title 11 of the U.S.  
Code must file a return if the bankruptcy estate has gross  
income of $13,850 or more for tax years beginning in 2023.  
Income, Deductions, and Credits  
Failure to do so may result in an estimated Request for  
Administrative Expenses being filed by the IRS in the  
bankruptcy proceeding or a motion to compel filing of the  
return.  
Under section 1398(c), the taxable income of the bankruptcy  
estate is generally figured in the same manner as that of an  
individual. The gross income of the bankruptcy estate  
includes any income included in property of the estate as  
defined in U.S. Code, title 11, sections 541, 1115, and 1186.  
The filing of a tax return for the bankruptcy estate  
doesn't relieve the individual debtor(s) of their  
!
In certain chapter 11 cases, under section 1115 of title 11,  
property of the bankruptcy estate includes (a) earnings from  
services performed by the debtor after the beginning of the  
case (both wages and self-employment income) and before  
the case is closed, dismissed, or converted to a case under a  
different chapter; and (b) property described in section 541 of  
title 11 and income earned therefrom that the debtor acquires  
after the beginning of the case and before the case is closed,  
dismissed, or converted. If section 1115 of title 11 applies,  
the bankruptcy estate's gross income includes, as described  
above, (a) the debtor's earnings from services performed  
CAUTION  
individual tax obligations.  
EIN  
Every bankruptcy estate of an individual required to file a  
return must have its own EIN. The SSN of the individual  
debtor can't be used as the EIN for the bankruptcy estate.  
16  
Instructions for Form 1041 (2023)  
 
after the beginning of the case, and (b) the income from  
property acquired after the beginning of the case.  
Excess credits, such as the foreign tax credit, may also be  
carried back to pre-bankruptcy years of the individual debtor.  
Standard deduction. A bankruptcy estate that doesn't  
itemize deductions is allowed a standard deduction of  
$13,850 for tax year 2023.  
Discharge of indebtedness. In a title 11 case, gross  
income doesn't include amounts that would normally be  
included in gross income resulting from the discharge of  
indebtedness. However, any amounts excluded from gross  
income must be applied to reduce certain tax attributes in a  
certain order. Attach Form 982 to show the reduction of tax  
attributes.  
The income from property owned by the debtor when the  
case began is also included in the bankruptcy estate's gross  
income. However, if this property is exempted from the  
bankruptcy estate or is abandoned by the trustee or  
debtor-in-possession, the income from the property isn't  
included in the bankruptcy estate's gross income. Also  
included in income is gain from the sale of the bankruptcy  
estate's property. To figure gain, the trustee or  
debtor-in-possession must determine the correct basis of the  
property.  
Tax Rate Schedule  
To determine whether any amount paid or incurred by the  
bankruptcy estate is allowable as a deduction or credit, or is  
treated as wages for employment tax purposes, treat the  
amount as if it were paid or incurred by the individual debtor  
in the same trade or business or other activity the debtor  
engaged in before the bankruptcy proceedings began.  
Administrative expenses. The bankruptcy estate is  
allowed a deduction for any administrative expense allowed  
under section 503 of title 11 of the U.S. Code, and any fee or  
charge assessed under chapter 123 of title 28 of the U.S.  
Code, to the extent not disallowed under an Internal Revenue  
Code provision (for example, section 263, 265, or 275).  
Bankruptcy administrative expenses and fees, including  
accounting fees, attorney fees, and court costs, are  
deductible on Schedule 1 (Form 1040), Part II, line 24z, as  
allowable in arriving at AGI because they would not have  
been incurred if property had not been held by the  
bankruptcy estate. See section 67(e) and Final Regulations -  
TD9918.  
Figure the tax for the bankruptcy estate using the tax rate  
schedule below. Enter the tax on Form 1040 or 1040-SR,  
line 16.  
If taxable income is:  
Of the  
But not over  
Over—  
The tax is: amount over  
$0  
11,000  
$11,000  
44,725  
95,375  
182,100  
231,250  
346,875  
......  
10%  
$1,100.00 + 12%  
5,147.00 + 22%  
16,290.00 + 24%  
37,104.00 + 32%  
52,832.00 + 35%  
93,300.75 + 37%  
$0  
11,000  
44,725  
44,725  
95,375  
95,375  
182,100  
231,250  
346,875  
182,100  
231,250  
346,875  
Prompt Determination of Tax Liability  
Administrative expenses of the bankruptcy estate  
attributable to conducting a trade or business or for the  
production of estate rents or royalties are deductible in  
arriving at AGI on Form 1040, Schedules C, E, and F.  
To request a prompt determination of the tax liability of the  
bankruptcy estate, the trustee or debtor-in-possession must  
file a written request for the determination with the IRS. The  
request must be submitted in duplicate and executed under  
penalties of perjury. The request must include a statement  
indicating that it is a request for prompt determination of tax  
liability and (a) the return type, and all the tax periods for  
which prompt determination is sought; (b) the name and  
location of the office where the return was filed; (c) the  
debtor's name; (d) the debtor's SSN, TIN, or EIN; (e) the type  
of bankruptcy estate; (f) the bankruptcy case number; and (g)  
the court where the bankruptcy is pending. Send the request  
to the Centralized Insolvency Operation, P.O. Box 7346,  
Philadelphia, PA 19101-7346 (marked “Request for Prompt  
Determination”).  
Administrative expense loss. When figuring an NOL,  
nonbusiness deductions (including administrative expenses)  
are limited under section 172(d)(4) to the bankruptcy estate's  
nonbusiness income. The excess nonbusiness deductions  
are an administrative expense loss that may be carried back  
to each of the 3 preceding tax years and forward to each of  
the 7 succeeding tax years of the bankruptcy estate. The  
amount of an administrative expense loss that may be carried  
to any tax year is determined after the NOL deductions  
allowed for that year. An administrative expense loss is  
allowed only to the bankruptcy estate and can't be carried to  
any tax year of the individual debtor.  
The IRS will notify the trustee or debtor-in-possession  
within 60 days from receipt of the request if the return filed by  
the trustee or debtor-in-possession has been selected for  
examination or has been accepted as filed. If the return is  
selected for examination, it will be examined as soon as  
possible. The IRS will notify the trustee or  
Carryback of NOLs and credits.  
Generally, an NOL arising in a tax year beginning in  
2021 or later may not be carried back and instead  
!
CAUTION  
must be carried forward indefinitely. However,  
farming losses arising in tax years beginning in 2021 or later  
may be carried back 2 years and carried forward indefinitely.  
See Pub. 536 and Pub. 225, Farmer’s Tax Guide, for more  
information.  
debtor-in-possession of any tax due within 180 days from  
receipt of the request or within any additional time permitted  
by the bankruptcy court.  
See Rev. Proc. 2006-24, 2006-22 I.R.B. 943, available at  
Announcement 2011-77, available at IRS.gov/irb/  
If the bankruptcy estate itself incurs an NOL (apart from  
losses carried forward to the estate from the individual  
debtor), it can carry back its NOLs not only to previous tax  
years of the bankruptcy estate, but also to tax years of the  
individual debtor prior to the year in which the bankruptcy  
proceedings began.  
17  
Instructions for Form 1041 (2023)  
 
Special Filing Instructions for Bankruptcy Estates  
Address  
Include the suite, room, or other unit number after the street  
address. If the post office doesn't deliver mail to the street  
address and the fiduciary has a P.O. box, show the box  
number instead.  
Use Form 1041 only as a transmittal for Form 1040 or  
1040-SR. In the top margin of Form 1040 or 1040-SR, enter  
“Attachment to Form 1041. DO NOT DETACH.” Attach Form  
1040 or 1040-SR to Form 1041. Complete only the  
identification area at the top of Form 1041. Enter the name of  
the individual debtor in the following format: John Q. Public  
Bankruptcy Estate.Beneath, enter the name of the trustee in  
the following format: “Avery Snow, Trustee.In item D, enter  
the date the petition was filed or the date of conversion to a  
chapter 7 or 11 case.  
If you want a third party (such as an accountant or an  
attorney) to receive mail for the estate or trust, enter on the  
street address line “C/O” followed by the third party's name  
and street address or P.O. box.  
If the estate or trust has had a change of address  
(including a change to an “in care of” name and address) and  
did not file Form 8822-B, Change of Address or Responsible  
Party — Business, check the Change in fiduciary's address  
box in item F.  
Enter on Form 1041, line 24, the total tax from line 24 of  
Form 1040 or 1040-SR. Complete lines 25 through 30 of  
Form 1041, and sign and date it.  
If the estate or trust has a change of mailing address  
(including a new "in care of" name and address) or  
responsible party after filing its return, file Form 8822-B to  
notify the IRS of the change.  
In a chapter 11 case, the bankruptcy estate's gross  
income may be affected by section 1115 or 1186 of title 11 of  
the U.S. Code. See Income, Deductions, and Credits, earlier.  
The debtor may receive a Form W-2, 1099-INT, 1099-DIV,  
1099-MISC, or 1099-NEC or other information return  
reporting wages or other income to the debtor for the entire  
year, even though some or all of this income is includible in  
the bankruptcy estate's gross income under section 1115 of  
title 11 of the U.S. Code. If this happens, the income reported  
to the debtor on the Form W-2 or 1099, or other information  
return (and the withheld income tax shown on these forms)  
must be reasonably allocated between the debtor and the  
bankruptcy estate. The debtor-in-possession (or the  
chapter 11 trustee, if one was appointed) must attach a  
schedule that shows (a) all the income reported on the Form  
W-2, Form 1099, or other information return; (b) the portion of  
this income includible in the bankruptcy estate's gross  
income; and (c) all the withheld income tax, if any, and the  
portion of withheld tax reasonably allocated to the bankruptcy  
estate. Also, the debtor-in-possesion (or the chapter 11  
trustee, if one was appointed) must attach a copy of the Form  
W-2, if any, issued to the debtor for the tax year if the Form  
W-2 reports wages to the debtor and some or all of the  
wages are includible in the bankruptcy estate's gross income  
because of section 1115 of title 11 of the U.S. Code. For  
more details, including acceptable allocation methods, see  
Notice 2006-83, 2006-40 I.R.B. 596, available at IRS.gov/irb/  
A. Type of Entity  
Check the appropriate box(es) that describes the entity for  
which you are filing the return.  
In some cases, more than one box is checked. Check all  
boxes that apply to your trust. For example, if only a portion of  
a trust is a grantor type trust or if only a portion of an ESBT is  
the S portion, then more than one box is checked.  
Note. Determination of entity status is made on an annual  
basis.  
There are special reporting requirements for grantor  
type trusts, pooled income funds, ESBTs, and  
!
CAUTION  
bankruptcy estates. See Special Reporting  
Instructions, earlier.  
Decedent's Estate  
An estate of a deceased person is a taxable entity separate  
from the decedent. It generally continues to exist until the  
final distribution of the assets of the estate is made to the  
heirs and other beneficiaries. The income earned from the  
property of the estate during the period of administration or  
settlement must be accounted for and reported by the estate.  
Simple Trust  
Specific Instructions  
A trust may qualify as a simple trust if:  
Name of Estate or Trust  
1. The trust instrument requires that all income must be  
Copy the exact name of the estate or trust from the Form  
SS-4, Application for Employer Identification Number, that  
you used to apply for the EIN. If the name of the trust was  
changed during the tax year for which you are filing, enter the  
trust's new name and check the “Change in trust's name” box  
in item F.  
distributed currently;  
2. The trust instrument doesn't provide that any amounts  
are to be paid, permanently set aside, or used for charitable  
purposes; and  
3. The trust doesn't distribute amounts allocated to the  
corpus of the trust.  
If a grantor type trust (discussed later), enter the name,  
identification number, and address of the grantor(s) or other  
owner(s) in parentheses after the name of the trust.  
Complex Trust  
A complex trust is any trust that doesn't qualify as a simple  
trust as explained above.  
Name and Title of Fiduciary  
Qualified Disability Trust  
A qualified disability trust is any non-grantor trust:  
1. Described in 42 U.S.C. 1396p(c)(2)(B)(iv) and  
established solely for the benefit of an individual under 65  
years of age who is disabled, and  
Enter the name and title of the fiduciary. If the name entered  
is different from the name on the prior year's return, see  
Change in Fiduciary's Name and Change in Fiduciary, later.  
18  
                 
2. All the beneficiaries of which are determined by the  
Commissioner of Social Security to have been disabled for  
some part of the tax year within the meaning of 42 U.S.C.  
1382c(a)(3).  
life interest is figured using the yearly rate of return earned by  
the trust. See section 642(c) and the related regulations for  
more information.  
B. Number of Schedules K-1 Attached  
A trust will not fail to meet item 2 above just because the  
trust's corpus may revert to a person who isn't disabled after  
the trust ceases to have any disabled beneficiaries.  
Every trust or decedent's estate claiming an income  
distribution deduction on page 1, line 18, must enter the  
number of Schedules K-1 (Form 1041) that are attached to  
Form 1041.  
ESBT (S Portion Only)  
The S portion of an ESBT is the portion of the trust that  
consists of S corporation stock and that isn't treated as  
owned by the grantor or another person. See Electing Small  
Business Trusts (ESBTs), earlier, for more information about  
an ESBT.  
C. Employer Identification Number  
Every estate or trust that is required to file Form 1041 must  
have an EIN. An EIN may be applied for in the following ways.  
Online at IRS.gov/EIN. The EIN is issued immediately  
once the application information is validated.  
By mailing or faxing Form SS-4.  
Grantor Type Trust  
If the estate or trust hasn't received its EIN by the time the  
A grantor type trust is a legal trust under applicable state law  
that isn't recognized as a separate taxable entity for income  
tax purposes because the grantor or other substantial owners  
have not relinquished complete dominion and control over  
the trust.  
return is due, enter “Applied for” and the date you applied in  
the space for the EIN. For more details, see Pub. 583,  
Starting a Business and Keeping Records.  
D. Date Entity Created  
Generally, for transfers made in trust after March 1, 1986,  
the grantor is treated as the owner of any portion of a trust in  
which they have a reversionary interest in either the income  
or corpus therefrom, if, as of the inception of that portion of  
the trust, the value of the reversionary interest is more than  
5% of the value of that portion. Also, the grantor is treated as  
holding any power or interest that was held by either the  
grantor's spouse at the time that the power or interest was  
created or who became the grantor's spouse after the  
creation of that power or interest. See Grantor Type Trusts,  
earlier, for more information.  
Pre-need funeral trusts. The purchasers of pre-need  
funeral services are the grantors and the owners of pre-need  
funeral trusts established under state laws. See Rev. Rul.  
87-127, 1987-2 C.B. 156. However, the trustees of pre-need  
funeral trusts can elect to file the return and pay the tax for  
qualified funeral trusts. For more information, see Form  
1041-QFT.  
Enter the date the trust was created, or, if a decedent's  
estate, the date of the decedent's death.  
E. Nonexempt Charitable and  
Split-Interest Trusts  
Section 4947(a)(1) Trust  
Check this box if the trust is a nonexempt charitable trust  
within the meaning of section 4947(a)(1).  
A nonexempt charitable trust is a trust:  
That isn't exempt from tax under section 501(a);  
In which all of the unexpired interests are devoted to one or  
more charitable purposes described in section 170(c)(2)(B);  
and  
For which a deduction was allowed under section 170 (for  
individual taxpayers) or similar Code section for personal  
holding companies, foreign personal holding companies, or  
estates or trusts (including a deduction for estate or gift tax  
purposes).  
Nonqualified deferred compensation plans. Taxpayers  
may adopt and maintain grantor trusts in connection with  
nonqualified deferred compensation plans (sometimes  
referred to as “rabbi trusts”). Rev. Proc. 92-64, 1992-2 C.B.  
422, provides a “model grantor trust” for use in rabbi trust  
arrangements. The procedure also provides guidance for  
requesting rulings on the plans that use these trusts.  
Nonexempt charitable trust treated as a private founda-  
tion. If a nonexempt charitable trust is treated as though it  
were a private foundation under section 509, then the  
fiduciary must file Form 990-PF, Return of Private  
Foundation, in addition to Form 1041.  
If a nonexempt charitable trust is treated as though it were  
a private foundation, and it has no taxable income under  
subtitle A, it may check the box on Form 990-PF, Part VI-A,  
line 15, and enter the tax-exempt interest received or accrued  
during the year on that line, instead of filing Form 1041 to  
meet its section 6012 filing requirement for that tax year.  
Excise taxes. If a nonexempt charitable trust is treated as  
a private foundation, then it is subject to the same excise  
taxes under chapters 41 and 42 that a private foundation is  
subject to. If the nonexempt charitable trust is liable for any of  
these taxes (except the section 4940 tax), then it reports  
these taxes on Form 4720. Taxes paid by the trust on Form  
4720 or on Form 990-PF (the section 4940 tax) can't be taken  
as a deduction on Form 1041.  
QSSTs. The beneficiary of a QSST is treated as the  
substantial owner of that portion of the trust which consists of  
stock in an S corporation for which an election under section  
1361(d)(2) has been made. See QSSTs, earlier.  
Bankruptcy Estate  
A chapter 7 or 11 bankruptcy estate is a separate and distinct  
taxable entity from the individual debtor for federal income  
tax purposes. See Bankruptcy Estates, earlier.  
For more information, see section 1398 and Pub. 908.  
Pooled Income Fund  
A pooled income fund is a split-interest trust with a remainder  
interest for a public charity and a life income interest retained  
by the donor or for another person. The property is held in a  
pool with other pooled income fund property and doesn't  
include any tax-exempt securities. The income for a retained  
Not a Private Foundation  
Check this box if the nonexempt charitable trust (section  
4947(a)(1)) isn't treated as a private foundation under section  
19  
Instructions for Form 1041 (2023)  
                                 
509. For more information, see Regulations section  
53.4947-1.  
In the top margin of your corrected Schedule H, enter  
“CORRECTED” and the date you discovered the error. Also,  
on an attachment, explain the reason for your correction. If  
you owe tax, pay the tax in full with your amended Form  
1041. If you overpaid tax on a previously filed Schedule H,  
depending on whether you choose the adjustment or claim  
for refund process to correct the error, you must either repay  
or reimburse the employee's share of social security and  
Medicare taxes or get the employee's consent to the filing of  
a refund claim for their share. See Pub. 926, Household  
Employer's Tax Guide, for more information.  
Amended Schedule K-1 (Form 1041). If the amended  
return results in a change to income, or a change in  
distribution of any income or other information provided to a  
beneficiary, an amended Schedule K-1 (Form 1041) must  
also be filed with the amended Form 1041 and given to each  
beneficiary. Check the “Amended K-1” box at the top of the  
amended Schedule K-1.  
Other returns that must be filed. If a nonexempt charitable  
trust isn't treated as though it were a private foundation, the  
fiduciary must file Form 990, Return of Organization Exempt  
From Income Tax; or Form 990-EZ, Short Form Return of  
Organization Exempt From Income Tax, in addition to Form  
1041, if the trust meets the filing requirements for either of  
those forms.  
If a nonexempt charitable trust isn't treated as though it  
were a private foundation, and it has no taxable income  
under subtitle A, it may answer “Yes” on Form 990, Part V,  
line 12a, and enter the tax-exempt interest received or  
accrued during the year on Form 990, Part V, line 12b,  
instead of filing Form 1041 to meet its section 6012 filing  
requirement for that tax year (or if Form 990-EZ is filed  
instead of Form 990, you may check the box on Form  
990-EZ, line 43, and enter the tax-exempt interest received or  
accrued during the year on that line).  
Final Return  
Check this box if this is a final return because the estate or  
trust has terminated. Also, check the “Final K-1” box at the  
top of Schedule K-1.  
Section 4947(a)(2) Trust  
Check this box if the trust is a split-interest trust described in  
section 4947(a)(2).  
If, on the final return, there are excess deductions, an  
unused capital loss carryover, or an NOL carryover, see the  
instructions for box 11 of Schedule K-1, later.  
A split-interest trust is a trust that:  
Isn't exempt from tax under section 501(a);  
Has some unexpired interests that are devoted to  
purposes other than religious, charitable, or similar purposes  
described in section 170(c)(2)(B); and  
Change in Trust's Name  
If the name of the trust has changed from the name shown on  
the prior year's return (or Form SS-4 if this is the first return  
being filed), be sure to check this box.  
Has amounts transferred in trust after May 26, 1969, for  
which a deduction was allowed under section 170 (for  
individual taxpayers) or similar Code sections for personal  
holding companies, foreign personal holding companies, or  
estates or trusts (including a deduction for estate or gift tax  
purposes).  
Change in Fiduciary  
If a different fiduciary enters their name on the line for Name  
and title of fiduciary than was shown on the prior year's return  
(or Form SS-4 if this is the first return being filed) and you  
didn't file a Form 8822-B, be sure to check this box. If there is  
a change in the fiduciary whose address is used as the  
mailing address for the estate or trust after the return is filed,  
use Form 8822-B to notify the IRS.  
Other returns that must be filed. The fiduciary of a  
split-interest trust must file Form 5227. However, see the  
Instructions for Form 5227 for the exception that applies to  
split-interest trusts other than section 664 CRTs.  
F. Initial Return, Amended Return, etc.  
Change in Fiduciary's Name  
If the fiduciary changed their name from the name they  
entered on the prior year's return (or Form SS-4 if this is the  
first return being filed), be sure to check this box.  
Amended Return  
If you are filing an amended Form 1041:  
Check the “Amended return” box in item F,  
Complete the entire return,  
Correct the appropriate lines with the new information, and  
Refigure the estate's or trust's tax liability.  
Change in Fiduciary's Address  
If the same fiduciary who filed the prior year's return (or Form  
SS-4 if this is the first return being filed) files the current  
year's return and changed the address on the return  
Note. If you are amending the return for an NOL  
carryback, also check the “Net operating loss carryback” box  
in item F.  
(including a change to an "in care of" name and address),  
and didn't report the change on Form 8822-B, check this box.  
If the total tax on line 24 is larger on the amended return  
than on the original return, you should generally pay the  
difference with the amended return. However, you should  
adjust this amount if there is any increase or decrease in the  
total payments shown on line 26.  
If the address shown on Form 1041 changes after you file  
the form (including a change to an "in care of" name and  
address), file Form 8822-B to notify the IRS of the change.  
G. Section 645 Election  
Attach a sheet that explains the reason for the  
amendments and identifies the lines and amounts being  
changed on the amended return.  
Amended Schedule H (Form 1040). If you discover an  
error on a Schedule H (Form 1040), Household Employment  
Taxes, that you previously filed with Form 1041, file an  
“Amended” Form 1041 and attach a corrected Schedule H.  
If a section 645 election was made by filing Form 8855, check  
the box in item G. See Special Rule for Certain Revocable  
Trusts under Who Must File, earlier, and Form 8855 for more  
information about this election.  
20  
Instructions for Form 1041 (2023)  
                     
Line 2a—Total Ordinary Dividends  
Report the estate's or trust's share of all ordinary dividends  
received during the tax year.  
Income  
Determining Qualified Business Income (QBI)  
The estate's or trust's QBI includes items of income, gain,  
deduction, and loss that are effectively connected with the  
conduct of a trade or business within the United States and  
included or allowed in determining taxable income for the  
year. This includes the estate's or trust's share of items of  
income, gain, deduction, and loss from trades or business  
conducted by partnerships (other than publicly traded  
partnerships (PTPs)), S corporations, and other estates or  
trusts. For more information, see section 199A, the  
Instructions for Form 8995, and the Instructions for Form  
8995-A.  
For the year of the decedent's death, Forms 1099-DIV  
issued in the decedent's name may include dividends earned  
after the date of death that should be reported on the income  
tax return of the decedent's estate. When preparing the  
decedent's final income tax return, report on Schedule B  
(Form 1040), line 5, the ordinary dividends shown on Form  
1099-DIV. Under the last entry on line 5, subtotal all the  
dividends reported on line 5. Below the subtotal, enter “Form  
1041” and the name and address shown on Form 1041 for  
the decedent's estate. Also, show the part of the ordinary  
dividends reported on Form 1041 and subtract it from the  
subtotal.  
Special Rule for Blind Trust  
Report capital gain distributions on Schedule D  
If you are reporting income from a qualified blind trust (under  
the Ethics in Government Act of 1978), don't identify the  
payer of any income to the trust but complete the rest of the  
return as provided in the instructions. Also enter “Blind Trust”  
at the top of page 1.  
(Form 1041), line 13.  
TIP  
Line 2b—Qualified Dividends  
Enter the beneficiary's allocable share of qualified dividends  
on line 2b(1) and enter the estate's or trust's allocable share  
on line 2b(2).  
Extraterritorial Income Exclusion  
The extraterritorial income exclusion isn't allowed for  
transactions after 2006. However, income from certain  
long-term sales and leases may still qualify for the exclusion.  
For details and to figure the amount of the exclusion, see  
Form 8873, Extraterritorial Income Exclusion, and its  
separate instructions. The estate or trust must report the  
extraterritorial income exclusion on line 15a of Form 1041,  
page 1.  
If the estate or trust received qualified dividends that were  
derived from IRD, you must reduce the amount on line 2b(2)  
by the portion of the estate tax deduction claimed on Form  
1041, page 1, line 19, that is attributable to those qualified  
dividends. Don't reduce the amounts on line 2b by any other  
allocable expenses.  
Note. The beneficiary's share (as figured above) may differ  
from the amount entered on line 2b of Schedule K-1 (Form  
1041).  
Although the extraterritorial income exclusion is entered  
on line 15a, it is an exclusion from income and should be  
treated as tax-exempt income when completing other parts of  
the return.  
Qualified dividends. Qualified dividends are eligible for a  
lower tax rate than other ordinary income. Generally, these  
dividends are reported to the estate or trust in box 1b of  
Form(s) 1099-DIV. See Pub. 550 for the definition of qualified  
dividends if the estate or trust received dividends not  
reported on Form 1099-DIV.  
Exception. Some dividends may be reported to the estate  
or trust as in box 1b of Form 1099-DIV but aren't qualified  
dividends. These include the following.  
Line 1—Interest Income  
Report the estate's or trust's share of all taxable interest  
income that was received during the tax year. Examples of  
taxable interest include interest from:  
Accounts (including certificates of deposit and money  
market accounts) with banks, credit unions, and thrift  
institutions;  
Dividends received on any share of stock that the estate or  
Notes, loans, and mortgages;  
trust held for less than 61 days during the 121-day period that  
began 60 days before the ex-dividend date. The ex-dividend  
date is the first date following the declaration of a dividend on  
which the purchaser of a stock isn't entitled to receive the  
next dividend payment. When counting the number of days  
the stock was held, include the day the estate or trust  
disposed of the stock but not the day it acquired the stock.  
However, you can't count certain days during which the  
estate's or trust's risk of loss was diminished. See Pub. 550  
for more details.  
U.S. Treasury bills, notes, and bonds;  
U.S. savings bonds;  
Original issue discount; and  
Income received as a regular interest holder of a real  
estate mortgage investment conduit (REMIC).  
For taxable bonds acquired after 1987, amortizable bond  
premium is treated as an offset to the interest income instead  
of as a separate interest deduction. See Pub. 550.  
For the year of the decedent's death, Forms 1099-INT  
issued in the decedent's name may include interest income  
earned after the date of death that should be reported on the  
income tax return of the decedent's estate. When preparing  
the decedent's final income tax return, report on Schedule B  
(Form 1040), line 1, the total interest shown on Form  
1099-INT. Under the last entry on line 1, subtotal all the  
interest reported on line 1. Below the subtotal, enter “Form  
1041” and the name and address shown on Form 1041 for  
the decedent's estate. Also, show the part of the interest  
reported on Form 1041 and subtract it from the subtotal.  
Dividends attributable to periods totaling more than 366  
days that the estate or trust received on any share of  
preferred stock held for less than 91 days during the 181-day  
period that began 90 days before the ex-dividend date. When  
counting the number of days the stock was held, include the  
day the estate or trust disposed of the stock but not the day it  
acquired the stock. However, you can't count certain days  
during which the estate's or trust's risk of loss was  
diminished. See Pub. 550 for more details. Preferred  
dividends attributable to periods totaling less than 367 days  
are subject to the 61-day holding period rule above.  
21  
Instructions for Form 1041 (2023)  
         
Dividends on any share of stock to the extent that the  
property other than capital assets and also from involuntary  
conversions (other than casualty or theft).  
estate or trust is under an obligation (including a short sale)  
to make related payments with respect to positions in  
substantially similar or related property.  
Line 8—Other Income  
Enter other items of income not included on lines 1, 2a, and 3  
through 7. List the type and amount on an attached schedule  
if the estate or trust has more than one item.  
Payments in lieu of dividends, but only if you know or have  
reason to know that the payments are not qualified dividends.  
If you have an entry on line 2b(2), be sure you use  
Schedule D (Form 1041), the Schedule D Tax  
Worksheet, or the Qualified Dividends Tax  
TIP  
Items to be reported on line 8 include the following.  
Unpaid compensation received by the decedent's estate  
Worksheet, whichever applies, to figure the estate's or trust's  
tax. Figuring the estate's or trust's tax liability in this manner  
will usually result in a lower tax.  
that is IRD.  
Any part of a total distribution shown on Form 1099-R,  
Distributions From Pensions, Annuities, Retirement or  
Profit-Sharing Plans, IRAs, Insurance Contracts, etc., that is  
treated as ordinary income. For more information, see Form  
4972, Tax on Lump-Sum Distributions, and its instructions.  
Line 3—Business Income or (Loss)  
If the estate operated a business, report the income and  
expenses on Schedule C (Form 1040), Profit or Loss From  
Business. Enter the net profit or (loss) from Schedule C on  
line 3.  
Taxable contributions received during the tax year by an  
Alaska Native Settlement Trust from an Alaska Native  
Corporation. Report gain from taxable contributions of  
noncash property on Schedule D (Form 1041).  
The amount of payroll tax credit taken by an employer on  
Line 4—Capital Gain or (Loss)  
Enter the gain from Schedule D (Form 1041), Part III, line 19,  
column (3), or the loss from Part IV, line 20.  
its 2023 employment tax returns (Forms 941, 943, and 944)  
for qualified paid sick and qualified paid family leave under  
the Families First Coronavirus Response Act (FFCRA) and  
the American Rescue Plan Act of 2021 (ARP) (both the  
nonrefundable and refundable portions). These amounts  
must be included in gross income for the tax year that  
includes the last day of the calendar quarter with respect to  
which the credit is allowed. A credit is available only if the  
leave was taken sometime after March 31, 2020, and before  
October 1, 2021, and only after the qualified leave wages  
were paid, which might under certain circumstances not  
occur until a quarter after September 30, 2021, including  
quarters during 2022. Accordingly, all lines related to  
qualified sick and family leave wages remain on the  
employment tax returns for 2023.  
If you deferred a capital gain into a QOF, you must file your  
return with Schedule D, Form 8949, and Form 8997 attached.  
You will need to file Form 8997 annually until you dispose of  
the investment. See the Form 8997 instructions.  
Don't substitute Schedule D (Form 1040) for  
Schedule D (Form 1041).  
!
CAUTION  
Line 5—Rents, Royalties, Partnerships, Other  
Estates and Trusts, etc.  
Use Schedule E (Form 1040), Supplemental Income and  
Loss, to report the estate's or trust's share of income or  
(losses) from rents, royalties, partnerships, S corporations,  
other estates and trusts, and REMICs. Also use Schedule E  
(Form 1040) to report farm rental income and expenses  
based on crops or livestock produced by a tenant. Enter the  
net profit or (loss) from Schedule E on line 5. See the  
Instructions for Schedule E (Form 1040) for reporting  
requirements.  
Note. Beginning in tax year 2021, there is no current year  
section 965(a) income inclusion reported on line 8. However,  
see the instructions for Schedule G, Part I, line 8, later, for  
information about a triggering event for a section 965(i) net  
tax liability.  
Deductions  
Depreciation, Depletion, and Amortization  
If the estate or trust received a Schedule K-1 from a  
partnership, S corporation, or other flow-through entity, use  
the corresponding lines on Form 1041 to report the interest,  
dividends, capital gains, etc., from the flow-through entity.  
A trust or decedent's estate is allowed a deduction for  
depreciation, depletion, and amortization only to the extent  
the deductions aren't apportioned to the beneficiaries. An  
estate or trust isn't allowed to make an election under section  
179 to expense depreciable business assets.  
Line 6—Farm Income or (Loss)  
If the estate or trust operated a farm, use Schedule F (Form  
1040), Profit or Loss From Farming, to report farm income  
and expenses. Enter the net profit or (loss) from Schedule F  
on line 6.  
The estate's or trust's share of depreciation, depletion,  
and amortization is generally reported on the appropriate  
lines of Schedule C, E, or F (Form 1040), the net income or  
loss from which is shown on line 3, 5, or 6 of Form 1041. If  
the deduction isn't related to a specific business or activity,  
then report it on line 15a.  
Depreciation. For a decedent's estate, the depreciation  
deduction is apportioned between the estate and the heirs,  
legatees, and devisees on the basis of the estate's income  
allocable to each.  
For a trust, the depreciation deduction is apportioned  
between the income beneficiaries and the trust on the basis  
of the trust income allocable to each, unless the governing  
instrument (or local law) requires or permits the trustee to  
maintain a depreciation reserve. If the trustee is required to  
If an estate or trust has farm rental income and  
expenses based on crops or livestock produced by a  
!
CAUTION  
tenant, report the income and expenses on  
Schedule E (Form 1040). Don't use Form 4835, Farm Rental  
Income and Expenses, or Schedule F (Form 1040) to report  
such income and expenses and don't include the net profit or  
(loss) from such income and expenses on line 6.  
Line 7—Ordinary Gain or (Loss)  
Enter from line 17 of Form 4797, Sales of Business Property,  
the ordinary gain or loss from the sale or exchange of  
22  
Instructions for Form 1041 (2023)  
 
maintain a reserve, the deduction is first allocated to the trust,  
up to the amount of the reserve. Any excess is allocated  
among the income beneficiaries and the trust in the same  
manner as the trust's accounting income. See Regulations  
section 1.167(h)-1(b).  
Depletion. For mineral or timber property held by a  
decedent's estate, the depletion deduction is apportioned  
between the estate and the heirs, legatees, and devisees on  
the basis of the estate's income from such property allocable  
to each.  
Accrued Expenses  
Generally, an accrual basis taxpayer can deduct accrued  
expenses in the tax year that (a) all events have occurred that  
determine the liability, and (b) the amount of the liability can  
be figured with reasonable accuracy. However, all the events  
that establish liability are treated as occurring only when  
economic performance takes place. There are exceptions for  
recurring items. See section 461(h).  
Limitations on Deductions  
For mineral or timber property held in trust, the depletion  
deduction is apportioned between the income beneficiaries  
and the trust based on the trust income from such property  
allocable to each, unless the governing instrument (or local  
law) requires or permits the trustee to maintain a reserve for  
depletion. If the trustee is required to maintain a reserve, the  
deduction is first allocated to the trust, up to the amount of  
the reserve. Any excess is allocated among the beneficiaries  
and the trust in the same manner as the trust's accounting  
income. See Regulations section 1.611-1(c)(4).  
Amortization. The deduction for amortization is apportioned  
between an estate or trust and its beneficiaries under the  
same principles used to apportion the deductions for  
depreciation and depletion.  
At-Risk Loss Limitations  
Generally, the amount the estate or trust has “at-risk” limits  
the loss it can deduct for any tax year. Use Form 6198,  
At-Risk Limitations, to figure the deductible loss for the year  
and file it with Form 1041. For more information, see Pub.  
925, Passive Activity and At-Risk Rules.  
Passive Activity Loss and Credit Limitations  
In general. Section 469 and the regulations thereunder  
generally limit losses from passive activities to the amount of  
income derived from all passive activities. Similarly, credits  
from passive activities are generally limited to the tax  
attributable to such activities. These limitations are first  
applied at the estate or trust level.  
Generally, an activity is a passive activity if it involves the  
conduct of any trade or business, and the taxpayer does not  
materially participate in the activity. Passive activities don't  
include working interests in oil and gas properties. See  
section 469(c)(3).  
The deduction for the amortization of reforestation  
expenditures under section 194 is allowed only to an estate.  
Allocable share from a pass-through entity.  
Depreciation, depletion, and amortization received from a  
pass-through entity on a Schedule K-1 are apportioned and  
reported in the same manner as discussed above. A section  
179 expense received from a pass-through entity on a  
Schedule K-1 isn't deductible by the estate or trust.  
Note. Material participation standards for estates and trusts  
haven't been established by regulations.  
For a grantor trust, material participation is determined at  
Allocation of Deductions for Tax-Exempt Income  
the grantor level.  
Generally, no deduction that would otherwise be allowable is  
allowed for any expense (whether for business or for the  
production of income) that is allocable to tax-exempt income.  
Examples of tax-exempt income include:  
If the estate or trust distributes an interest in a passive  
activity, the basis of the property immediately before the  
distribution is increased by the passive activity losses  
allocable to the interest, and such losses can't be deducted.  
See section 469(j)(12).  
Certain death benefits (section 101),  
Interest on state or local bonds (section 103),  
Compensation for injuries or sickness (section 104), and  
Income from discharge of indebtedness in a title 11 case  
Losses from passive activities are first subject to the  
at-risk rules. When the losses are deductible under  
TIP  
the at-risk rules, the passive activity rules then apply.  
(section 108).  
Exception. State income taxes and business expenses that  
Rental activities. Generally, rental activities are passive  
activities, whether or not the taxpayer materially participates.  
However, certain taxpayers who materially participate in real  
property trades or businesses aren't subject to the passive  
activity limitations on losses from rental real estate activities  
in which they materially participate. For more details, see  
section 469(c)(7).  
are allocable to tax-exempt interest are deductible.  
Expenses that are directly allocable to tax-exempt income  
are allocated only to tax-exempt income. A reasonable  
proportion of expenses indirectly allocable to both  
tax-exempt income and other income must be allocated to  
each class of income.  
For tax years of an estate ending less than 2 years after  
the decedent's date of death, up to $25,000 of deductions  
and deduction equivalents of credits from rental real estate  
activities in which the decedent actively participated are  
allowed. Any excess losses or credits are suspended for the  
year and carried forward.  
Portfolio income. Portfolio income isn't treated as income  
from a passive activity, and passive losses and credits  
generally may not be applied to offset it. Portfolio income  
generally includes interest, dividends, royalties, and income  
from annuities. Portfolio income of an estate or trust must be  
accounted for separately.  
Deductions That May Be Allowable for Estate  
Tax Purposes  
Administration expenses and casualty and theft losses  
deductible on Form 706 may be deducted, to the extent  
otherwise deductible for income tax purposes, on Form 1041  
if the fiduciary files a statement waiving the right to deduct  
the expenses and losses on Form 706. The statement must  
be filed before the expiration of the statutory period of  
limitations for the tax year the deduction is claimed. See Pub.  
559 for more information.  
23  
Instructions for Form 1041 (2023)  
 
2. Any qualified residence interest (see later), and  
Forms to file. See Form 8582, Passive Activity Loss  
Limitations, to figure the amount of losses allowed from  
passive activities. See Form 8582-CR, Passive Activity Credit  
Limitations, to figure the amount of credit allowed for the  
current year.  
3. Any interest payable under section 6601 on any unpaid  
portion of the estate tax attributable to the value of a  
reversionary or remainder interest in property for the period  
during which an extension of time for payment of such tax is  
in effect.  
Business Interest  
Business interest expense could be limited. For more  
information about limitations on deductions for business  
interest, see section 163(j) and Line 10—Interest, later.  
Limitation on deduction of business interest. Business  
interest expense is limited to the sum of business interest  
income, 30% of the adjusted taxable income, and floor plan  
financing interest. Business interest expense includes any  
interest paid or accrued on indebtedness properly allocable  
to a trade or business. A taxpayer, other than a tax shelter,  
that meets the gross receipts test is not required to limit  
business interest expense under section 163(j). A taxpayer  
meets the gross receipts test if the taxpayer has average  
annual gross receipts of $29 million or less for the 3 prior tax  
years. Gross receipts include the aggregate gross receipts  
from all persons treated as a single employer such as a  
controlled group of corporations, commonly controlled  
partnerships or proprietorships, and affiliated service groups.  
If the taxpayer fails to meet the gross receipts test, Form  
8990 is generally required.  
Investment interest. Generally, investment interest is  
interest (including amortizable bond premium on taxable  
bonds acquired after October 22, 1986, but before January 1,  
1988) that is paid or incurred on indebtedness that is properly  
allocable to property held for investment. Investment interest  
doesn't include any qualified residence interest, or interest  
that is taken into account under section 469 in figuring  
income or loss from a passive activity.  
Generally, net investment income (NII) is the excess of  
investment income over investment expenses. Investment  
expenses (other than interest) are deductible only to the  
extent they are allowable under section 67(e).  
The amount of the investment interest deduction may be  
limited. Use Form 4952, Investment Interest Expense  
Deduction, to figure the allowable investment interest  
deduction.  
If you must complete Form 4952, check the box on line 10  
of Form 1041 and attach Form 4952. Then, add the  
deductible investment interest to the other types of  
deductible interest and enter the total on line 10.  
Transactions Between Related Taxpayers  
Under section 267, a trust that uses the accrual method of  
accounting may only deduct business expenses and interest  
owed to a related party in the year the payment is included in  
the income of the related party. For this purpose, a related  
party includes:  
1. A grantor and a fiduciary of any trust;  
2. A fiduciary of a trust and a fiduciary of another trust, if  
the same person is a grantor of both trusts;  
3. A fiduciary of a trust and a beneficiary of such trust;  
4. A fiduciary of a trust and a beneficiary of another trust,  
if the same person is a grantor of both trusts;  
5. A fiduciary of a trust and a corporation more than 50%  
in value of the outstanding stock of which is owned, directly  
or indirectly, by or for the trust or by or for a person who is a  
grantor of the trust; and  
6. An executor of an estate and a beneficiary of that  
estate, except for a sale or exchange to satisfy a pecuniary  
bequest (that is, a bequest of a sum of money).  
Line 10—Interest  
Enter the amount of interest (subject to limitations) paid or  
incurred by the estate or trust on amounts borrowed by the  
estate or trust, or on debt acquired by the estate or trust (for  
example, outstanding obligations from the decedent) that  
isn't claimed elsewhere on the return.  
If the proceeds of a loan were used for more than one  
purpose (for example, to purchase a portfolio investment and  
to acquire an interest in a passive activity), the fiduciary must  
make an interest allocation according to the rules in  
Temporary Regulations section 1.163-8T.  
Qualified residence interest. Interest paid or incurred by  
an estate or trust on indebtedness secured by a qualified  
residence of a beneficiary of an estate or trust is treated as  
qualified residence interest if the residence would be a  
qualified residence (that is, the principal residence or the  
secondary residence selected by the beneficiary) if owned by  
the beneficiary. The beneficiary must have a present interest  
in the estate or trust or an interest in the residuary of the  
estate or trust. See Pub. 936, Home Mortgage Interest  
Deduction, for an explanation of the general rules for  
deducting home mortgage interest.  
Don't include interest paid on indebtedness incurred or  
continued to purchase or carry obligations on which the  
interest is wholly exempt from income tax.  
Personal interest isn't deductible. Examples of personal  
interest include interest paid on:  
Revolving charge accounts used to purchase personal-use  
property;  
Personal notes for money borrowed from a bank, a credit  
union, or other person;  
Installment loans on personal-use property; and  
See section 163(h)(3) for a definition of qualified  
Underpayments of federal, state, or local income taxes.  
residence interest and for limitations on indebtedness.  
Interest that is paid or incurred on indebtedness allocable  
to a trade or business (including a rental activity) should be  
deducted on the appropriate line of Schedule C, E, or F  
(Form 1040), the net income or loss from which is shown on  
line 3, 5, or 6 of Form 1041.  
Line 11—Taxes  
The deduction for state and local taxes is limited to  
$10,000. The limitation applies to the total of your  
!
CAUTION  
state and local income taxes (or general sales taxes,  
Types of interest to include on line 10 are:  
if elected instead of income taxes), real estate taxes, and  
personal property taxes. The limitation does not apply to  
foreign income taxes, and state and local taxes paid or  
1. Any investment interest (subject to limitations—see  
below),  
24  
Instructions for Form 1041 (2023)  
accrued in carrying on a trade or business or for the  
production of income.  
2. In return for the cash contribution, you received a state  
or local tax credit.  
3. You must reduce your charitable contribution  
deduction by the amount of the state or local tax credit you  
receive.  
Enter any deductible taxes paid or incurred during the tax  
year that aren't deductible elsewhere on Form 1041.  
Deductible taxes include the following.  
State and local income taxes. You can deduct state and  
If you meet these conditions, and to the extent you apply the  
state or local tax credit to this or a prior year's state or local  
tax liability, you may include this amount on line 11. To the  
extent you apply a portion of the credit to offset your state or  
local tax liability in a subsequent year (as permitted by law),  
you may treat this amount as state or local tax paid in the  
year the credit is applied. For more information about this  
safe harbor and examples, see Notice 2019-12.  
local income taxes unless you elect to deduct state and local  
general sales taxes. You can't deduct both.  
State and local general sales taxes. You can elect to  
deduct state and local general sales taxes instead of state  
and local income taxes. Generally, you can elect to deduct  
the actual state and local general sales taxes (including  
compensating use taxes) you paid in 2023 if the tax rate was  
the same as the general sales tax rate. However, sales taxes  
on food, clothing, medical supplies, and motor vehicles are  
deductible as a general sales tax even if the tax rate was less  
than the general sales tax rate. Sales taxes on motor vehicles  
are also deductible as a general sales tax if the tax rate was  
more than the general sales tax rate, but the tax is deductible  
only up to the amount of tax that would have been imposed at  
the general sales tax rate. Motor vehicles include cars,  
motorcycles, motor homes, recreational vehicles, sport utility  
vehicles, trucks, vans, and off-road vehicles. Also include any  
state and local general sales taxes paid for a leased motor  
vehicle.  
Line 12—Fiduciary Fees  
Enter the deductible fees paid or incurred to the fiduciary for  
administering the estate or trust during the tax year.  
Fiduciary expenses include probate court fees and costs,  
fiduciary bond premiums, legal publication costs of notices to  
creditors or heirs, the cost of certified copies of the  
decedent's death certificate, and costs related to fiduciary  
accounts.  
Fiduciary fees deducted on Form 706 can't be  
deducted on Form 1041.  
TIP  
Do not include sales taxes paid on items used in a trade or  
business. An estate or trust cannot use the Optional State  
Sales Tax Tables for individuals in the Instructions for  
Schedule A (Form 1040), Itemized Deductions, to figure its  
deduction.  
Note. Fiduciary fees are allowable under section 67(e) if  
they are costs that are paid or incurred in connection with the  
administration of an estate or a non-grantor trust that would  
not have been incurred if the property were not held in such  
estate or trust. See Final Regulations - TD9918 and  
Regulations section 1.67-4 for more information.  
State and local real property taxes.  
Note. The deduction for foreign real property taxes is no  
longer allowed.  
Line 14—Attorney, Accountant, and Return  
Preparer Fees  
State and local personal property taxes.  
Foreign or U.S. territory income taxes. You may want to  
take a credit for the tax instead of a deduction. See the  
instructions for Schedule G, Part I, line 2a, later, for more  
details.  
Expenses for preparation of fiduciary income tax returns, the  
decedent's final individual income tax returns, and all estate  
and GST tax returns are fully deductible. However, expenses  
for preparing all other tax returns, including gift tax returns,  
are considered costs commonly and customarily incurred by  
individuals and are not deductible. For more information, see  
Final Regulations - TD9918 and Regulations section 1.67-4.  
The generation-skipping transfer (GST) tax imposed on  
income distributions.  
Don't deduct:  
Federal income taxes;  
Estate, inheritance, legacy, succession, and gift taxes;  
Federal duties and excise taxes; or  
Foreign real property taxes.  
Line 15a—Other Deductions  
Attach your own statement, listing by type and amount all  
allowable deductions that aren't deductible elsewhere on  
Form 1041.  
Allowable deductions include all deductions listed in  
section 67(b) (including estate taxes attributable to IRD under  
section 691(c)), and other costs allowable under section  
67(e) paid or incurred in connection with the administration of  
the estate or trust that would not have been incurred if the  
property were not held in the estate or trust.  
Don't include any losses on worthless bonds and similar  
obligations and nonbusiness bad debts. Report these losses,  
as applicable, on Form 8949.  
Do not deduct the estate's or trust's deduction for social  
security and Medicare taxes by the amount claimed on its  
employment tax returns for the nonrefundable and refundable  
portions of the FFCRA and the ARP credits for qualified sick  
and family leave wages. Instead, report this amount as  
income on line 8.  
Safe harbor for certain charitable contributions made in  
exchange for a state or local tax credit. If you made a  
charitable contribution in exchange for a state or local tax  
credit and your charitable contribution deduction must be  
reduced as a result of receiving or expecting to receive the  
tax credit, you may qualify for a safe harbor that allows you to  
treat some or all of the disallowed charitable contribution as a  
payment of state and local taxes. The safe harbor applies if  
you meet the following conditions.  
Don't deduct medical or funeral expenses on Form 1041.  
Medical expenses of the decedent paid by the estate may be  
deductible on the decedent's income tax return for the year  
incurred. See section 213(c). Funeral expenses are  
deductible only on Form 706.  
1. You made a cash contribution to an entity described in  
section 170(c).  
Other costs paid or incurred by estates and non-grantor  
trusts. Under section 67(e), deductions are allowable for  
25  
Instructions for Form 1041 (2023)  
costs which are paid or incurred by an estate or non-grantor  
trust in connection with the administration of the estate or  
trust and would not have been incurred if the property were  
not held in such estate or trust.  
In determining whether a cost is deductible by an estate or  
non-grantor trust, it must be determined whether the cost  
would be “commonly or customarily” incurred by a  
hypothetical individual owning the same property. If the cost  
would be deductible by a hypothetical individual, it is not  
deductible by the estate or non-grantor trust.  
It is the type of product or service rendered to the estate or  
non-grantor trust in exchange for the cost, rather than the  
description of the cost of that product or service, that is  
determinative.  
Costs that are incurred commonly or customarily by  
individuals include costs incurred in defense of a claim  
against the estate, the decedent, or the non-grantor trust that  
are unrelated to the existence, validity, or administration of  
the estate or trust. These amounts are not allowable  
deductions.  
Ownership costs. Ownership costs are costs that are  
chargeable to or incurred by an owner of property simply by  
reason of being the owner of the property. These costs are  
commonly or customarily incurred by a hypothetical  
individual owner of such property and are not deductible by  
an estate or non-grantor trust. Under section 67(b), they  
include, but are not limited to, condominium fees, insurance  
premiums, maintenance and lawn services, automobile  
registration and insurance costs, and partnership costs  
deemed to be passed through to and reportable by a partner.  
Other expenses incurred merely by reason of the ownership  
of property may be fully deductible under other provisions of  
the Code.  
commonly or customarily by individuals, then (except to the  
extent provided otherwise by guidance published in the  
Internal Revenue Bulletin) the single fee, commission, or  
other expense (bundled fee) must be allocated between the  
costs that are incurred commonly or customarily by  
individuals, such costs not being deductible, and costs that  
are not incurred commonly or customarily by individuals,  
such costs being deductible.  
There is an exception to the allocation rule if a bundled fee  
is not computed on an hourly basis. In this situation, only the  
portion of that fee that is attributable to investment advice is  
not deductible. The remaining portion is deductible.  
Out-of-pocket expenses billed to the estate or non-grantor  
trust are treated as separate from the bundled fee and are not  
subject to allocation.  
Estates and non-grantor trusts cannot deduct payments  
made from the bundled fee to third parties if such payments  
would not have been deductible if they had been paid directly  
by the estate or non-grantor trust.  
Any reasonable method may be used to allocate a  
bundled fee, including without limitation the allocation of a  
portion of a fiduciary commission that is a bundled fee to  
investment advice. For more information, see Regulations  
section 1.67-4(c)(4).  
Note. The reasonable method standard does not apply to  
determine the portion of the bundled fee attributable to  
payments made to third parties commonly or customarily  
incurred by an individual or to any other separately assessed  
expense commonly or customarily incurred by an individual,  
because those payments and expenses are readily  
identifiable without any discretion on the part of the fiduciary  
or return preparer.  
For more information, see Regulations section 1.67-4.  
Appraisal fees. Appraisal fees incurred to determine the  
FMV of assets as of the decedent's date of death (or the  
alternate valuation date), to determine value for purposes of  
making distributions, or as otherwise required to properly  
prepare the estate's or trust's tax returns, or a GST tax return,  
are not incurred commonly or customarily by an individual  
and are deductible. The cost of appraisals for other purposes  
(for example, insurance) is commonly or customarily incurred  
by individuals and is not an allowable deduction.  
Investment advisory fees. Fees for investment advice,  
including any related services that would be provided to any  
individual investor as part of an investment advisory fee, are  
incurred commonly or customarily by a hypothetical  
individual investor and are not deductible. However, certain  
incremental costs of investment advice beyond the amount  
that would normally be charged to an individual investor are  
deductible.  
An incremental cost is a special, additional charge that is  
added solely because the investment advice is rendered to a  
trust or estate rather than to an individual, including balancing  
beyond the usual varying interests of current beneficiaries  
and remaindermen. The deductible portion of the investment  
advisory fees is limited to the amount of those fees, if any,  
that exceeds the fees normally charged to an individual  
investor. See Regulations section 1.67-4(b)(4).  
Bundled fees. If an estate or non-grantor trust pays a single  
fee, commission, or other expense, such as a fiduciary's  
commission, attorney's fee, or accountant's fee for both costs  
that are incurred commonly or customarily by individuals and  
costs (other than a de minimis amount) that are not incurred  
Other Deductions Reported on Line 15a  
Bond premium(s). For taxable bonds acquired before  
October 23, 1986, if the fiduciary elected to amortize the  
premium, report the amortization on this line. If you made the  
election to amortize the premium, the basis in the taxable  
bond must be reduced by the amount of amortization.  
For tax-exempt bonds, you can't deduct the premium that  
is amortized. Although the premium can't be deducted, you  
must amortize the tax-exempt bond by the amount of  
premium amortized.  
For more information, see section 171 and Pub. 550.  
If you claim a bond premium deduction for the estate or  
trust, figure the deduction on a separate sheet and attach it to  
Form 1041.  
Casualty and theft losses. Use Form 4684, Casualties and  
Thefts, to figure any deductible casualty and theft losses.  
Estate's or trust's share of amortization, depreciation,  
and depletion not claimed elsewhere. If you can't deduct  
the estate's or trust's apportioned share of amortization,  
depreciation, and depletion as rent or royalty expenses on  
Schedule E (Form 1040), or as business or farm expenses on  
Schedule C or F (Form 1040), itemize the estate's or trust's  
apportioned share of the deductions on an attached sheet  
and include them on line 15a.  
Note. Don't report the beneficiary's apportioned share of  
depreciation, depletion, and amortization on line 15a. Report  
26  
Instructions for Form 1041 (2023)  
the beneficiary's apportioned share of deductions in box 9 of  
Schedule K-1 (Form 1041).  
Itemize each beneficiary's apportioned share of the  
deductions and report them in the appropriate box of  
Schedule K-1 (Form 1041).  
Also, a deduction is allowed for the GST tax imposed as a  
result of a taxable termination or a direct skip occurring as a  
result of the death of the transferor. See section 691(c)(3).  
Enter the estate's or trust's share of these deductions on  
line 19.  
Section 179D. Enter any applicable deduction under  
section 179D for costs of energy efficient commercial  
business property placed in service during the tax year.  
Complete and attach Form 7205, Energy Efficient  
Commercial Buildings Deduction.  
Line 20—Qualified Business Income Deduction  
To figure your QBI deduction, use Form 8995 or Form  
8995-A, as applicable.  
Use Form 8995 if:  
You have QBI (loss), real estate investment trust (REIT)  
Line 15b—Net Operating Loss Deduction  
An estate or trust is allowed an NOLD under section 172.  
dividends, or PTP income (loss);  
Your 2023 taxable income before the QBI deduction is less  
than or equal to $182,100; and  
If you claim an NOLD for the estate or trust, figure the  
deduction on a separate sheet and attach it to the return.  
You aren’t a patron in a specified agricultural or  
horticultural cooperative.  
Line 18—Income Distribution Deduction  
If you don’t meet these requirements, use Form 8995-A.  
Attach whichever form you use (Form 8995 or 8995-A) to  
your return. Also attach Schedule C, E, or F (Form 1040),  
whichever form you use to report information about your QBI.  
See the instructions for Forms 8995 and 8995-A for more  
information for figuring and reporting your QBI deduction.  
If the estate or trust was required to distribute income  
currently or if it paid, credited, or was required to distribute  
any other amounts to beneficiaries during the tax year,  
complete Schedule B to determine the estate's or trust's  
income distribution deduction. However, if you are filing for a  
pooled income fund, don't complete Schedule B. Instead,  
attach a statement to support the computation of the income  
distribution deduction. For more information, see Pooled  
Income Funds, earlier.  
Note. Report the beneficiary’s apportioned share of items of  
QBI (loss) subject to beneficiary specific determinations, W-2  
wages, unadjusted basis immediately after acquisition (UBIA)  
of qualified property, qualified REIT dividends, and qualified  
PTP income on a statement attached to Schedule K-1 (Form  
1041). See the instructions for box 14, code I, of  
If the estate or trust claims an income distribution  
deduction, complete and attach:  
Part I (through line 24) and Part II of Schedule I (Form  
Schedule K-1 (Form 1041), later.  
1041) to refigure the deduction on a minimum tax basis, and  
Schedule K-1 (Form 1041) for each beneficiary to which a  
Line 21—Exemption  
distribution was made or required to be made.  
Decedents' estates. A decedent's estate is allowed a $600  
Cemetery perpetual care fund. On line 18, deduct the  
amount, not more than $5 per gravesite, paid for  
exemption.  
Trusts required to distribute all income currently. A trust  
whose governing instrument requires that all income be  
distributed currently is allowed a $300 exemption, even if it  
distributed amounts other than income during the tax year.  
Qualified disability trusts. A qualified disability trust is  
allowed a $4,700 exemption. This amount is not subject to  
phaseout.  
maintenance of cemetery property. To the right of the entry  
space for line 18, enter the number of gravesites. Also enter  
“Section 642(i) trust” in parentheses after the trust's name at  
the top of Form 1041. You don't have to complete Schedule B  
of Form 1041, and Schedule K-1 (Form 1041).  
Don't enter less than zero on line 18.  
Line 19—Estate Tax Deduction Including Certain  
Generation-Skipping Transfer Taxes  
A qualified disability trust is any trust:  
1. Described in 42 U.S.C. 1396p(c)(2)(B)(iv) and  
established solely for the benefit of an individual under 65  
years of age who is disabled, and  
2. All of the beneficiaries of which are determined by the  
Commissioner of Social Security to have been disabled for  
some part of the tax year within the meaning of 42 U.S.C.  
1382c(a)(3).  
If the estate or trust includes IRD in its gross income, and  
such amount was included in the decedent's gross estate for  
estate tax purposes, the estate or trust is allowed to deduct in  
the same tax year that the income is included that portion of  
the estate tax imposed on the decedent's estate that is  
attributable to the inclusion of the IRD in the decedent's  
estate. For an example of the computation, see Regulations  
section 1.691(c)-1 and Pub. 559.  
A trust will not fail to meet item 2 above just because the  
trust's corpus may revert to a person who isn't disabled after  
the trust ceases to have any disabled beneficiaries.  
If any amount properly paid, credited, or required to be  
distributed by an estate or trust to a beneficiary consists of  
IRD received by the estate or trust, don't include such  
amounts in determining the estate tax deduction for the  
estate or trust. Figure the deduction on a separate sheet.  
Attach the sheet to your return.  
All other trusts. A trust not described above is allowed a  
$100 exemption.  
Tax and Payments  
Line 23—Taxable Income  
If you claim a deduction for estate tax attributable to  
qualified dividends or capital gains, you may have to  
!
Minimum taxable income. Line 23 can't be less than the  
CAUTION  
adjust the amount on Form 1041, page 1, line 2b(2);  
larger of:  
or Schedule D (Form 1041), line 22.  
27  
Instructions for Form 1041 (2023)  
                         
The inversion gain of the estate or trust, as figured under  
Line 28—Tax Due  
section 7874, if the estate or trust is an expatriated entity or a  
partner in an expatriated entity; or  
You must pay the tax in full when the return is filed. You may  
pay by EFTPS. For more information about EFTPS, see  
Electronic Deposits, earlier. Also, you may pay by check or  
money order or by credit or debit card.  
The sum of the excess inclusions of the estate or trust from  
Schedule Q (Form 1066), Quarterly Notice to Residual  
Interest Holder of REMIC Taxable Income or Net Loss  
Allocation, line 2c.  
To pay by check or money order. If you pay by check or  
money order:  
Net operating loss (NOL). If line 23 (figured without regard  
to the minimum taxable income rule stated above) is a loss,  
the estate or trust may have an NOL. Don't include the  
deductions claimed on lines 13, 18, and 21 when figuring the  
amount of the NOL.  
Generally, an NOL can only be carried forward to  
subsequent years and cannot be carried back. The 2-year  
carryback period only applies to the portion of an NOL  
attributable to a farming loss. For more information, see Pub.  
536.  
Complete Schedule A of Form 1045, Application for  
Tentative Refund, to figure the amount of the NOL that is  
available for carryback or carryover. Use Form 1045 or file an  
amended return to apply for a refund based on an NOL  
carryback. For more information, see the Instructions for  
Form 1045.  
Make it payable to “United States Treasury”;  
Make sure the name of the estate or trust appears on the  
payment;  
Write the estate’s or trust’s EIN and “2023 Form 1041” on  
the payment;  
Consider completing the 2023 Form 1041-V; and  
Enclose, but don't attach, the payment (and Form 1041-V,  
if completed) with Form 1041.  
Note. The IRS can't accept a single check (including a  
cashier's check) for amounts of $100,000,000 ($100 million)  
or more. If you're sending $100 million or more by check,  
you'll need to spread the payments over two or more checks  
with each check made out for an amount less than $100  
million. The $100 million or more amount limit doesn't apply  
to other methods of payment (such as electronic payments),  
so please consider paying by means other than checks.  
On the termination of the estate or trust, any unused NOL  
carryover that would be allowable to the estate or trust in a  
later tax year but for the termination is allowed to the  
beneficiaries succeeding to the property of the estate or trust.  
See the instructions for box 11, codes E and F, of  
Schedule K-1 (Form 1041), later.  
Excess deductions on termination. If the estate or trust  
has for its final year deductions (excluding the charitable  
deduction and personal exemption) in excess of its gross  
income, the excess deductions are allowed to the  
To pay by credit or debit card. For information on paying  
your taxes electronically, including by credit or debit card, go  
Line 30a—Credited to 2024 Estimated Tax  
Enter the amount from line 29 that you want applied to the  
estate's or trust's 2024 estimated tax.  
Schedule A—Charitable Deduction  
beneficiaries succeeding to the property of the estate or trust  
and retain their separate character as an amount allowed in  
arriving at AGI, a non-miscellaneous itemized deduction, or a  
miscellaneous itemized deduction. In general, an unused  
NOL carryover that is allowed to beneficiaries (as explained  
above) can't also be treated as an excess deduction.  
However, if the final year of the estate or trust is also the last  
year of the NOL carryover period, the NOL carryover not  
absorbed in that tax year by the estate or trust is included as  
an excess deduction. See the instructions for box 11, codes  
A and B, of Schedule K-1 (Form 1041), later.  
General Instructions  
Generally, any part of the gross income of an estate or trust  
(other than a simple trust) that, under the terms of the will or  
governing instrument, is paid (or treated as paid) during the  
tax year for a charitable purpose specified in section 170(c) is  
allowed as a deduction to the estate or trust. It isn't  
necessary that the charitable organization be created or  
organized in the United States.  
A pooled income fund or a section 4947(a)(1) nonexempt  
charitable trust treated as a private foundation must attach a  
separate sheet to Form 1041 instead of using Schedule A of  
Form 1041 to figure the charitable deduction.  
Additional return to be filed by trusts. Trusts, other than  
split-interest trusts or nonexempt charitable trusts, that claim  
a charitable deduction also file Form 1041-A unless the trust  
is required to distribute currently to the beneficiaries all the  
income for the year determined under section 643(b) and  
related regulations.  
Pooled income funds and charitable lead trusts also file  
Form 5227. See Form 5227 for information about any  
exceptions.  
Election to treat contributions as paid in the prior tax  
year. The fiduciary of an estate or trust may elect to treat as  
paid during the tax year any amount of gross income  
received during that tax year or any prior tax year that was  
paid in the next tax year for a charitable purpose.  
Line 25—Current Payment on Deferred Net 965  
Tax Liability  
If you made a payment with respect to a current net 965 tax  
liability, enter the amount of the payment from Form 965-A,  
Part II, column (k).  
Line 27—Estimated Tax Penalty  
If line 28 is at least $1,000 and more than 10% of the tax  
shown on Form 1041, or the estate or trust underpaid its  
2023 estimated tax liability for any payment period, it may  
owe a penalty. See Form 2210 to determine whether the  
estate or trust owes a penalty and to figure the amount of the  
penalty.  
Note. The penalty may be waived or reduced under certain  
conditions. See Pub. 505, Tax Withholding and Estimated  
Tax, and the Instructions for Form 2210 for details.  
For example, if a calendar year estate or trust makes a  
qualified charitable contribution on February 7, 2024, from  
28  
Instructions for Form 1041 (2023)  
               
income earned in 2023 or prior, then the fiduciary can elect to  
treat the contribution as paid in 2023.  
To make the election, the fiduciary must file a statement  
with Form 1041 for the tax year in which the contribution is  
treated as paid. This statement must include:  
Don't include any capital gains for the tax year allocated to  
corpus and paid or permanently set aside for charitable  
purposes. Instead, enter these amounts on line 4.  
Line 2—Tax-Exempt Income Allocable to  
Charitable Contributions  
1. The name and address of the fiduciary;  
2. The name of the estate or trust;  
Any estate or trust that pays or sets aside any part of its  
income for a charitable purpose must reduce the deduction  
by the portion allocable to any tax-exempt income. If the  
governing instrument specifically provides as to the source  
from which amounts are paid, permanently set aside, or to be  
used for charitable purposes, the specific provisions control.  
In all other cases, determine the amount of tax-exempt  
income allocable to charitable contributions by multiplying  
line 1 by a fraction, the numerator of which is the total  
tax-exempt income of the estate or trust, and the  
denominator of which is the gross income of the estate or  
trust. Don't include in the denominator any losses allocated to  
corpus.  
3. An indication that the fiduciary is making an election  
under section 642(c)(1) for contributions treated as paid  
during such tax year;  
4. The name and address of each organization to which  
any such contribution is paid; and  
5. The amount of each contribution and date of actual  
payment or, if applicable, the total amount of contributions  
paid to each organization during the next tax year, to be  
treated as paid in the prior tax year.  
The election must be filed by the due date (including  
extensions) for Form 1041 for the next tax year. If the original  
return was filed on time, you may make the election on an  
amended return filed no later than 6 months after the due  
date of the return (excluding extensions). Enter “Filed  
pursuant to section 301.9100-2” at the top of the amended  
return and file it at the same address you used for your  
original return.  
Line 4—Capital Gains for the Tax Year Allocated to  
Corpus and Paid or Permanently Set Aside for  
Charitable Purposes  
For more information about the charitable deduction, see  
Enter the total of all capital gains for the tax year that are:  
section 642(c) and the related regulations.  
Allocated to corpus, and  
Paid or permanently set aside for charitable purposes.  
Specific Instructions  
Line 6—Section 1202 Exclusion Allocable to  
Capital Gains Paid or Permanently Set Aside for  
Charitable Purposes  
Line 1—Amounts Paid or Permanently Set Aside  
for Charitable Purposes From Gross Income  
Enter amounts that were paid for a charitable purpose out of  
the estate's or trust's gross income, including any capital  
gains that are attributable to income under the governing  
instrument or local law. Include amounts paid during the tax  
year from gross income received in a prior tax year, but only if  
no deduction was allowed for any prior tax year for these  
amounts.  
If the exclusion of gain from the sale or exchange of qualified  
small business (QSB) stock was claimed, enter the part of  
the gain included on Schedule A, lines 1 and 4, that was  
excluded under section 1202.  
Schedule B—Income Distribution  
Deduction  
General Instructions  
If the estate or trust was required to distribute income  
currently or if it paid, credited, or was required to distribute  
any other amounts to beneficiaries during the tax year,  
complete Schedule B to determine the estate's or trust's  
income distribution deduction.  
Estates, and certain trusts, may claim a deduction for  
amounts permanently set aside for a charitable purpose from  
gross income. Such amounts must be permanently set aside  
during the tax year to be used exclusively for religious,  
charitable, scientific, literary, or educational purposes, or for  
the prevention of cruelty to children or animals, or for the  
establishment, acquisition, maintenance, or operation of a  
public cemetery not operated for profit.  
For a trust to qualify, the trust may not be a simple trust,  
and the set-aside amounts must be required by the terms of a  
trust instrument that was created on or before October 9,  
1969.  
Note. Use Schedule I (Form 1041) to compute the DNI and  
income distribution deduction on a minimum tax basis.  
Pooled income funds. Don't complete Schedule B for  
these funds. Instead, attach a separate statement to support  
the computation of the income distribution deduction. See  
Pooled Income Funds, earlier, for more information.  
Separate share rule. If a single trust or an estate has more  
than one beneficiary, and if different beneficiaries have  
substantially separate and independent shares, their shares  
are treated as separate trusts or estates for the sole purpose  
of determining the DNI allocable to the respective  
beneficiaries.  
Further, the trust instrument must provide for an  
irrevocable remainder interest to be transferred to or for the  
use of an organization described in section 170(c) or the trust  
must have been created by a grantor who was at all times  
after October 9, 1969, under a mental disability to change the  
terms of the trust.  
Also, certain testamentary trusts that were established by  
a will that was executed on or before October 9, 1969, may  
qualify. See Regulations section 1.642(c)-2(b).  
If the separate share rule applies, figure the DNI allocable  
to each beneficiary on a separate sheet and attach the sheet  
29  
Instructions for Form 1041 (2023)  
         
to this return. Any deduction or loss that is applicable solely  
to one separate share of the trust or estate isn't available to  
any other share of the same trust or estate.  
If the exclusion of gain from the sale or exchange of QSB  
stock was claimed, don't reduce the gain on line 3 by any  
amount excluded under section 1202.  
For more information, see section 663(c) and related  
Line 5  
regulations.  
Withholding of tax on foreign persons. The fiduciary may  
be liable for withholding tax on distributions to beneficiaries  
who are foreign persons. For more information, see Pub. 515,  
and Forms 1042 and 1042-S.  
In figuring the amount of long-term and short-term capital  
gain for the tax year included on Schedule A, line 1, the  
specific provisions of the governing instrument control if the  
instrument specifically provides as to the source from which  
amounts are paid, permanently set aside, or to be used for  
charitable purposes.  
Specific Instructions  
Line 1—Adjusted Total Income  
In all other cases, determine the amount to enter by  
multiplying line 1 of Schedule A by a fraction, the numerator  
of which is the amount of net capital gains that are included in  
the accounting income of the estate or trust (that is, not  
allocated to corpus) and are distributed to charities, and the  
denominator of which is all items of income (including the  
amount of such net capital gains) included in the DNI.  
Generally, enter on Schedule B, line 1, the amount from  
line 17 on page 1 of Form 1041. However, if both line 4 and  
line 17 on page 1 of Form 1041 are losses, enter on  
Schedule B, line 1, the smaller of those losses. If line 4 is  
zero or a gain and line 17 is a loss, enter zero on line 1 of  
Schedule B.  
If you are filing for a simple trust, subtract from adjusted  
total income any extraordinary dividends or taxable stock  
dividends included on page 1, line 2, and determined under  
the governing instrument and applicable local law to be  
allocable to corpus.  
Reduce the amount on line 5 by any allocable section  
1202 exclusion.  
Line 8—Accounting Income  
If you are filing for a decedent's estate or a simple trust, skip  
this line. If you are filing for a complex trust, enter the income  
for the tax year determined under the terms of the governing  
instrument and applicable local law. Don't include  
extraordinary dividends or taxable stock dividends  
determined under the governing instrument and applicable  
local law to be allocable to corpus.  
Line 2—Adjusted Tax-Exempt Interest  
To figure the adjusted tax-exempt interest, follow the steps  
below.  
Step 1. Add tax-exempt interest income on line 2 of  
Schedule A, any expenses allowable under section 212  
allocable to tax-exempt interest, and any interest expense  
allocable to tax-exempt interest.  
Lines 9 and 10  
Don't include any:  
Step 2. Subtract the Step 1 total from the amount of  
tax-exempt interest (including exempt-interest dividends)  
received.  
Amount that was deducted on the prior year's return that  
was required to be distributed in the prior year,  
Amount that is paid or permanently set aside for charitable  
purposes or otherwise qualifying for the charitable deduction,  
or  
Section 212 expenses that are directly allocable to  
tax-exempt interest are allocated only to tax-exempt interest.  
A reasonable proportion of section 212 expenses that are  
indirectly allocable to both tax-exempt interest and other  
income must be allocated to each class of income.  
Amount that is properly paid or credited as a gift or  
bequest of a specific amount of money or specific property.  
Note. An amount that can be paid or credited only from  
income isn't considered a gift or bequest. Also, to qualify as a  
gift or bequest, the amount must be paid in three or fewer  
installments.  
Figure the interest expense allocable to tax-exempt  
interest according to the guidelines in Rev. Proc. 72-18,  
1972-1 C.B. 740.  
Line 9—Income Required To Be Distributed  
Currently  
See Regulations sections 1.643(a)-5 and 1.265-1 for more  
information.  
Line 9 is to be completed by all simple trusts as well as  
complex trusts and decedents’ estates that are required to  
distribute income currently, whether it is distributed or not.  
The determination of whether trust income is required to be  
distributed currently depends on the terms of the governing  
instrument and the applicable local law.  
Line 3  
Include all capital gains, whether or not distributed, that are  
attributable to income under the governing instrument or local  
law. For example, if the trustee distributed 50% of the current  
year's capital gains to the income beneficiaries (and reflects  
this amount on Schedule D (Form 1041), line 19, column (1)),  
but under the governing instrument all capital gains are  
attributable to income, then include 100% of the capital gains  
on line 3. If the amount on Schedule D (Form 1041), line 19,  
column (1), is a net loss, enter zero.  
The line 9 distributions are referred to as “first-tier  
distributions” and are deductible by the estate or trust to the  
extent of the DNI. The beneficiary includes such amounts in  
their income to the extent of their proportionate share of the  
DNI.  
30  
Instructions for Form 1041 (2023)  
     
distribution that is less than the DNI), then figure the  
adjustment by multiplying line 2 by a fraction, the numerator  
of which is the total distributions (line 11), and the  
denominator of which is the DNI (line 7). Enter the result on  
line 12.  
Line 10—Other Amounts Paid, Credited, or  
Otherwise Required To Be Distributed  
Line 10 is to be completed only by a decedent's estate or  
complex trust. These distributions consist of any other  
amounts paid, credited, or required to be distributed and are  
referred to as “second-tier distributions.Such amounts  
include annuities to the extent not paid out of income,  
mandatory and discretionary distributions of corpus, and  
distributions of property in kind.  
If line 11 includes tax-exempt income other than  
tax-exempt interest, figure line 12 by subtracting the total of  
the following from tax-exempt income included on line 11.  
1. The charitable contribution deduction allocable to such  
tax-exempt income.  
If Form 1041-T was timely filed to elect to treat estimated  
tax payments as made by a beneficiary, the payments are  
treated as paid or credited to the beneficiary on the last day  
of the tax year and must be included on line 10.  
2. Expenses allocable to tax-exempt income.  
Expenses that are directly allocable to tax-exempt income  
are allocated only to tax-exempt income. A reasonable  
proportion of expenses indirectly allocable to both  
tax-exempt income and other income must be allocated to  
each class of income.  
Unless a section 643(e)(3) election is made, the value of  
all noncash property actually paid, credited, or required to be  
distributed to any beneficiaries is the smaller of:  
1. The estate's or trust's adjusted basis in the property  
immediately before distribution, plus any gain or minus any  
loss recognized by the estate or trust on the distribution  
(basis of beneficiary); or  
Schedule G—Tax Computation and  
Payments  
2. The FMV of such property.  
Part I—Tax Computation  
If a section 643(e)(3) election is made by the fiduciary, then  
the amount entered on line 10 will be the FMV of the property.  
Line 1a  
2023 Tax Rate Schedule. For tax years beginning in 2023,  
figure the tax using the following Tax Rate Schedule and  
enter the tax on line 1a. However, see the Instructions for  
Schedule D (Form 1041) and the Qualified Dividends Tax  
Worksheet, later.  
A fiduciary of a complex trust or a decedent's estate may  
elect to treat any amount paid or credited to a beneficiary  
within 65 days following the close of the tax year as being  
paid or credited on the last day of that tax year. To make this  
election, see Question 6 under Other Information, later.  
2023 Tax Rate Schedule  
The beneficiary includes the amounts on line 10 in their  
income only to the extent of their proportionate share of the  
DNI.  
Complex trusts. If the second-tier distributions exceed the  
DNI allocable to the second tier, the trust may have an  
accumulation distribution. See the line 11 instructions below.  
If taxable  
income is:  
Of the  
But not over  
Over—  
Its tax is: amount over  
$0  
2,900  
10,550  
14,450  
$2,900  
10%  
$290 + 24%  
$2,126 + 35%  
$3,491 + 37%  
$0  
2,900  
10,550  
14,450  
10,550  
14,450  
-----  
Line 11—Total Distributions  
If line 11 is more than line 8, and you are filing for a complex  
trust that has previously accumulated income, see the  
instructions for Schedule J, later, to see if you must complete  
Schedule J (Form 1041), Accumulation Distribution for  
Certain Complex Trusts.  
Schedule D (Form 1041) and Schedule D Tax Work-  
sheet. Use Part V of Schedule D (Form 1041), or the  
Schedule D Tax Worksheet, whichever is applicable, to figure  
the estate's or trust's tax if the estate or trust files Schedule D  
(Form 1041) and has:  
A net capital gain and any taxable income, or  
Line 12—Adjustment for Tax-Exempt Income  
Qualified dividends on line 2b(2) of Form 1041 and any  
taxable income.  
In figuring the income distribution deduction, the estate or  
trust isn't allowed a deduction for any item of the DNI that isn't  
included in the gross income of the estate or trust. Thus, for  
purposes of figuring the allowable income distribution  
deduction, the DNI (line 7) is figured without regard to any  
tax-exempt interest.  
Qualified Dividends Tax Worksheet. If you don't have to  
complete Part I or Part II of Schedule D and the estate or trust  
has an amount entered on line 2b(2) of Form 1041 and any  
taxable income (line 23), then figure the estate's or trust's tax  
using the worksheet, later, and enter the tax on line 1a.  
If tax-exempt interest is the only tax-exempt income  
included in the total distributions (line 11), and the DNI  
(line 7) is less than or equal to line 11, then enter on line 12  
the amount from line 2.  
Note. You must reduce the amount you enter on line 2b(2) of  
Form 1041 by the portion of the section 691(c) deduction  
claimed on line 19 of Form 1041 if the estate or trust received  
qualified dividends that were IRD.  
Line 1c—Alternative minimum tax. Attach Schedule I  
If tax-exempt interest is the only tax-exempt income  
included in the total distributions (line 11), and the DNI is  
more than line 11 (that is, the estate or trust made a  
(Form 1041) if any of the following apply.  
The estate or trust must complete Schedule B.  
31  
Instructions for Form 1041 (2023)  
       
Keep for Your Records  
Qualified Dividends Tax Worksheet—Schedule G, Part I, Line 1a  
Caution: Don’t use this worksheet if the estate or trust must complete Schedule D (Form 1041).  
1. Enter the amount from Form 1041, line 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
1.  
2. Enter the amount from Form 1041, line 2b(2) . . . . . . . .  
2.  
3. If you are claiming investment interest expense on Form  
4952, enter the amount from line 4g; otherwise,  
enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.  
4. Subtract line 3 from line 2. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . .  
4.  
5.  
6.  
7.  
5. Subtract line 4 from line 1. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . .  
6. Enter the smaller of the amount on line 1 or $3,000 . . . . . . . . . . . . . . . . . . . .  
7. Enter the smaller of the amount on line 5 or line 6 . . . . . . . . . . . . . . . . . . . . . .  
8. Subtract line 7 from line 6. If zero or less, enter -0-. This amount is taxed at 0% . . . . . . . . . . . . . . . .  
8.  
9. Enter the smaller of line 1 or line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
10. Subtract line 8 from line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
11. Enter the smaller of line 1 or $14,650 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
12. Add lines 5 and 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
13. Subtract line 12 from line 11. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . .  
14. Enter the smaller of line 10 or line 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
9.  
10.  
11.  
12.  
13.  
14.  
15. Multiply line 14 by 15% (0.15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
15.  
16. Enter the amount from line 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
17. Add lines 8 and 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
18. Subtract line 17 from line 16. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . .  
16.  
17.  
18.  
19. Multiply line 18 by 20% (0.20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
20. Figure the tax on the amount on line 5. Use the 2023 Tax Rate Schedule . . . . . . . . . . . . . . . . . . . . . .  
21. Add lines 15, 19, and 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
22. Figure the tax on the amount on line 1. Use the 2023 Tax Rate Schedule . . . . . . . . . . . . . . . . . . . . . .  
23. Tax on all taxable income. Enter the smaller of line 21 or line 22 here and on  
19.  
20.  
21.  
22.  
Schedule G, line 1a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.  
The estate or trust claims a credit on line 2b, 2c, or 2d of  
Line 2b—General Business Credit  
Schedule G.  
Don't include any amounts that are allocated to a  
beneficiary. Credits that are allocated between the  
estate or trust and the beneficiaries are listed in the  
The estate's or trust's share of alternative minimum taxable  
income (line 27 of Schedule I (Form 1041)) exceeds $28,400.  
Enter the amount from line 54 of Schedule I (Form 1041) on  
line 1c.  
!
CAUTION  
instructions for box 13 of Schedule K-1, later. Generally,  
these credits are apportioned on the basis of the income  
allocable to the estate or trust and the beneficiaries.  
Line 1d—Total. If the amount from line 14 of Form 8978 is a  
positive amount, include it in the total reported on line 1d. On  
the dotted line next to line 1d, enter “From Form 8978” and  
the amount. Attach Form 8978.  
Enter on line 2b the estate's or trust's total general  
business credit allowed for the current year from Form 3800.  
The estate or trust must file Form 3800 to claim any of the  
general business credits. Generally, if the estate's or trust's  
only source of a credit is from a pass-through entity and the  
beneficiary isn't entitled to an allocable share of a credit, you  
aren't required to complete the source form for that credit.  
However, certain credits have limitations and special  
computations that may require you to complete the source  
form. See the Instructions for Form 3800 for more  
information.  
Line 2a—Foreign Tax Credit  
Attach Form 1116, Foreign Tax Credit (Individual, Estate, or  
Trust), if you elect to claim credit for income or profits taxes  
paid or accrued to a foreign country or a U.S. territory. The  
estate or trust may claim credit for that part of the foreign  
taxes not allocable to the beneficiaries (including charitable  
beneficiaries). Enter the estate's or trust's share of the credit  
on line 2a. See Pub. 514, Foreign Tax Credit for Individuals,  
for details.  
Line 2c—Credit for Prior Year Minimum Tax  
An estate or trust that paid AMT in a previous year may be  
eligible for a minimum tax credit in 2023. See Form 8801,  
32  
Instructions for Form 1041 (2023)  
   
Keep for Your Records  
ESBT Tax Worksheet—Schedule G, Part I, Line 4  
ESBT Tax Computation  
1.  
Ordinary income (loss) from Schedule K-1 (Form 1120-S) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
1.  
2a. Total ordinary dividends from Schedule K-1 (Form 1120-S) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
2a.  
2b. Qualified dividends from Schedule K-1 (Form 1120-S) . . . . . . . . . . . . . . . . . . .  
2b.  
3. Capital gain. See instructions and attach Schedule D (Form 1041) . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
4. Other income (loss) reported on Schedule K-1 (Form 1120-S) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
5. Total income. Add lines 1, 2a, 3, and 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
6. Other allowable deductions from Schedule K-1 (Form 1120-S) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
7. Administrative expenses (allocated to the S portion) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
8. State and local income taxes (allocated to the S portion) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
9. Interest expense on indebtedness to acquire S corporation stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
3.  
4.  
5.  
6.  
7.  
8.  
9.  
10. Charitable contribution deduction. Check here if deduction includes prior year carryover [  
]
. . . . . .  
10.  
11.  
12.  
13.  
11. Qualified business income deduction (S portion). Attach Form 8995 or 8995-A . . . . . . . . . . . . . . . . .  
12. Total deductions. Add lines 6 through 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
13. Taxable income (S portion). Subtract line 12 from line 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
14a. Tax. Tax on taxable income. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . .  
14b. Alternative minimum tax (S portion). Attach Schedule I (Form 1041) . . . . . . .  
14a.  
14b.  
14c. Total. Add lines 14a and 14b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
14c.  
15a. Foreign tax credit (S portion). Attach Form 1116 . . . . . . . . . . . . . . . . . . . . . . . .  
15b. General business credit (S portion). Attach Form 3800 . . . . . . . . . . . . . . . . . .  
15c. Credit for prior year minimum tax (S portion). Attach Form 8801 . . . . . . . . . . .  
15d. Bond credits (S portion). Attach Form 8912 . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
15a.  
15b.  
15c.  
15d.  
15e. Total credits. Add lines 15a through 15d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
15e.  
16. Recapture taxes (S portion). Check if from: Form 4255 [ ] or Form 8611 [  
17. Total ESBT tax. Subtract line 15e from line 14c and add line 16. Enter here and on Form 1041,  
Schedule G, Part I, line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.  
]
. . . . . . . . . . . . . . . . . .  
16.  
Credit for Prior Year Minimum Tax—Individuals, Estates, and  
Trusts.  
Line 4—Tax on the ESBT Portion of the Trust  
Use the ESBT Tax Worksheet above to figure the ESBT tax.  
Enter the amount from line 17 of the ESBT Tax Worksheet on  
line 4.  
Line 2d—Bond Credits  
Complete and attach Form 8912, Credit to Holders of Tax  
Credit Bonds, if the estate or trust claims a credit for holding  
a tax credit bond. Also, be sure to include the credit in  
interest income.  
See Electing Small Business Trusts (ESBTs), earlier, for  
the special tax computation rules that apply to the portion of  
an ESBT consisting of stock in one or more S corporations.  
Line 5—Net Investment Income Tax (NIIT)  
Line 2e—Total Credits  
Enter the amount of NIIT calculated and attach Form 8960.  
See the Instructions for Form 8960 to calculate the tax, and  
Net Investment Income Tax (NIIT), later, for more information.  
To claim a credit allowable to the estate or trust other than the  
credits entered on lines 2a through 2d, include the allowable  
credit in the total for line 2e. Complete and attach the  
appropriate form and enter the form number and amount of  
the allowable credit on the dotted line to the left of the entry  
space.  
Line 6a—Recapture of Investment Credit  
If the estate or trust disposed of investment credit property or  
changed its use before the end of the recapture period, see  
Form 4255, Recapture of Investment Credit, to figure the  
recapture tax allocable to the estate or trust. Include the tax  
on line 6a and enter “ICR” on the dotted line to the left of the  
entry space.  
If the amount from line 14 of Form 8978 is a negative  
amount, treat it as a positive amount and add it to the total  
reported on line 2e. On the dotted line next to line 2e, enter  
“From Form 8978” and the amount. Attach Form 8978.  
33  
Instructions for Form 1041 (2023)  
 
Enter on line 7 any household employment taxes owed  
from Schedule H (Form 1040), Part I, line 8d, or Part III,  
line 26.  
Line 6b—Recapture of Low-Income Housing  
Credit  
If the estate or trust disposed of property (or there was a  
reduction in the qualified basis of the property) on which the  
low-income housing credit was claimed, see Form 8611,  
Recapture of Low-Income Housing Credit, to figure any  
recapture tax allocable to the estate or trust. Include the tax  
on line 6b and enter “LIHCR” on the dotted line to the left of  
the entry space.  
Note. See Amended Schedule H (Form 1040 ) under F.  
Initial Return, Amended Return, etc., earlier, for information  
on filing an amended Schedule H (Form 1040) for a Form  
1041.  
Line 8—Other Taxes and Amounts Due  
Triggering event under section 965(i). If you had a  
triggering event under section 965(i) during the year, enter on  
line 8 the current year tax liability from the triggered deferred  
net 965 tax liability from Form 965-A, Part IV, column (f).  
ESBTs. If a triggering event occurred in the S portion of  
the ESBT, also include on the attachment that shows the  
amount of the net 965 tax liability attributable to the S portion  
of the trust the triggered deferred net 965 tax liability from  
Form 965-A, Part IV, column (f).  
Interest on deferred tax attributable to installment sales  
of certain timeshares and residential lots and certain  
nondealer real property installment obligations. If an  
obligation arising from the disposition of real property to  
which section 453(l) or 453A applies is outstanding at the  
close of the year, the estate or trust must include the interest  
due under section 453(l)(3)(B) or 453A(c), whichever is  
applicable, in the amount to be entered on Form 1041,  
Schedule G, line 8, with the notation “Section 453(l) interest”  
or “Section 453A(c) interest,whichever is applicable. Attach  
a schedule showing the computation.  
Form 4970, Tax on Accumulation Distribution of Trusts.  
Include on this line any tax due on an accumulation  
distribution from a trust. To the left of the entry space, enter  
“From Form 4970” and the amount of the tax.  
Form 8697, Interest Computation Under the Look-Back  
Method for Completed Long-Term Contracts. Include the  
interest due under the look-back method of section 460(b)  
(2). To the left of the entry space, enter “From Form 8697”  
and the amount of interest due.  
Form 8866, Interest Computation Under the Look-Back  
Method for Property Depreciated Under the Income  
Forecast Method. Include the interest due under the  
look-back method of section 167(g)(2). To the left of the entry  
space, enter “From Form 8866” and the amount of interest  
due.  
Interest on deferral of gain from certain constructive  
ownership transactions. Include the interest due under  
section 1260(b) on any deferral of gain from certain  
constructive ownership transactions. To the left of the entry  
space, enter “1260(b)” and the amount of interest due.  
Form 5329, Additional Taxes on Qualified Plans (Includ-  
ing IRAs) and Other Tax-Favored Accounts. If the estate  
or trust fails to receive the minimum distribution under section  
4974, use Form 5329 to pay the excise tax. To the left of the  
entry space, enter “From Form 5329” and the amount of the  
tax.  
Additional tax on the early disposition of noncash prop-  
erty for which a section 247(g)(3) election was made by  
an Alaska Native Settlement Trust. This additional 10%  
tax only should be shown on an amended return filed by a  
Settlement Trust for the year in which the Settlement Trust  
received a contribution of noncash property from an Alaska  
Native Corporation and elected to defer the recognition of  
Line 6c—Other Recapture Taxes  
Recapture of qualified electric vehicle credit. If the  
estate or trust claimed the qualified electric vehicle credit in a  
prior tax year for a vehicle that ceased to qualify for the credit,  
part or all of the credit may have to be recaptured. See  
Regulations section 1.30-1(b) for details. If the estate or trust  
owes any recapture tax, include it on line 6c and enter  
“QEVCR” on the dotted line to the left of the entry space.  
Recapture of the new markets credit. If the estate or trust  
owes any new markets recapture tax, include it on line 6c and  
enter “NMCR” on the dotted line to the left of the entry space.  
For more information, including how to figure the recapture  
amount, see section 45D(g).  
Recapture of the credit for employer-provided childcare  
facilities and services. If the facility ceased to operate as a  
qualified childcare facility or there was a change in  
ownership, part or all of the credit may have to be recaptured.  
See Form 8882, Credit for Employer-Provided Childcare  
Facilities and Services, for details. If the estate or trust owes  
any recapture tax, include it on line 6c and enter “ECCFR” on  
the dotted line to the left of the entry space.  
Recapture of the alternative motor vehicle credit. See  
section 30B(h)(8) for details. Include the tax on line 6c and  
enter “AMVCR” on the dotted line to the left of the entry  
space.  
Recapture of the alternative fuel vehicle refueling prop-  
erty credit. See section 30C(e)(5) for details. Include the tax  
on line 6c and enter “ARPCR” on the dotted line to the left of  
the entry space.  
Recapture of the section 45Q carbon oxide sequestra-  
tion credit. See Form 8933, Part III, line 22. Include the  
section 45Q recapture amount on line 6c and enter “COSCR”  
on the dotted line to the left of the entry space.  
Line 7—Household Employment Taxes  
If any of the following apply, get Schedule H (Form 1040) and  
its instructions to see if the estate or trust owes these taxes.  
1. The estate or trust paid any one household employee  
cash wages of $2,600 or more in 2023. Cash wages include  
wages paid by checks, money orders, etc. When figuring the  
amount of cash wages paid, combine cash wages paid by  
the estate or trust with cash wages paid to the household  
employee in the same calendar year by the household of the  
decedent or beneficiary for whom the administrator, executor,  
or trustee of the estate or trust is acting.  
2. The estate or trust withheld federal income tax during  
2023 at the request of any household employee.  
3. The estate or trust paid total cash wages of $1,000 or  
more in any calendar quarter of 2022 or 2023 to household  
employees.  
34  
Instructions for Form 1041 (2023)  
Keep for Your Records  
Form 8978 Worksheet—Schedule G, Part I, Line 8  
Use this worksheet if (a) Schedule G, line 3, is zero; (b) after line 3 was reduced to zero, you have a negative  
amount from Form 8978, line 14, that was not used to reduce line 3 to zero; and (c) you have chapter 1 taxes  
entered on Schedule G, line 4; Schedule G, lines 6a–6c; Schedule G, line 8; and/or tax and interest from Form  
8621.  
1. Enter the total amount of chapter 1 taxes from Schedule G, line 4; Schedule G, lines 6a–6c;  
Schedule G, line 8; and tax and interest from Form 8621 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.  
2. Enter the negative amount from Form 8978, line 14, that has not already been used to reduce  
(
(
)
)
Schedule G, line 3, to zero . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.  
3. Combine line 1 and line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
4. Enter the amount of non-chapter 1 taxes included on Schedule G, line 8 . . . . . . . . . . . . . . . . . . . . .  
5. If line 3 is negative, enter as a negative the amount from line 1. Otherwise, enter the amount from  
3.  
4.  
line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.  
6. Combine line 4 and line 5. Enter the result on Schedule G, line 8. This amount may be a negative  
number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.  
income related to such property, but disposed of the property  
within the first tax year subsequent to the tax year the  
Settlement Tr