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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Tax Preparer

Date & Time
  • event Date

    Wednesday, October 2, 2024

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    110 minutes

Credit Information

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

  • BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

$197.00
CPE
ALL

This course will provide fiduciary tax advisers and compliance professionals with the tools needed to navigate the unique challenges in reconciling and completing Form K-1 for estate and trust beneficiaries. The panel will discuss income classification and allocation of the trust's income distribution deduction among multiple beneficiaries and detail the interplay between the trust document, fiduciary accounting income, and the beneficiaries' K-1s.

Faculty

Neal B. Jannol
Attorney
Law Offices of Neal B. Jannol

Mr. Jannol is a sole practitioner in Los Angeles at the Law Offices of Neal B. Jannol. He has been an attorney for more than 20 years and concentrates his practice on sophisticated estate and tax planning for individual clients, the representation of individual and corporate fiduciaries, and the administration of estates and trusts. His experience includes drafting revocable and irrevocable trusts, business succession planning, premarital planning, charitable gift planning, and all aspects of estate administration and probate procedures. He is a member of the State Bar of California and is a Certified Specialist in Estate Planning, Trust & Probate Law. Mr. Jannol earned his B.A. degree, magna cum laude, from the University of California at Los Angeles and his J.D. degree from the University of California at Berkeley, Boalt Hall School of Law.

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Erin S. Fukuto
Partner
Eide Bailly

Ms. Fukuto is a Tax Partner and specializes in the Estate and Trust Tax Services for Eide Bailly, LLP, a certified public accounting firm. With over 40 years of experience, she provides tax compliance, planning and consulting services for high net worth individuals, business succession and perpetuation planning for closely-held businesses and non-profit organizations.  Ms. Fukuto's expertise includes estate and trust plan review and development, implementation and administration, tax compliance and strategic consulting services that allow her to work with complex estates and family wealth transfer issues. She obtained her Bachelor of Science in Accounting from the University of Southern California and her Masters degree in Taxation from Golden Gate University. Ms. Fukuto is a member of the American Institute of Certified Public Accountants and the California Society of Certified Public Accountants. She is also the Former Chair for the Orange County Estate Planning Council and Former Chair of the State Estate Planning Interest Group for the California Society of Certified Public Accountants.

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Paul W. Jones
Attorney
Hale & Wood, PLLC

Mr. Jones's practice deals with a broad range of expatriate tax, international tax, 1031 exchange and similar issues for clients.

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Description

Determining whether to issue a K-1 to a trust beneficiary and what to report can present particular challenges to a tax adviser. Depending on the provisions of the trust operating instrument, a beneficiary may receive a distribution that is taxable to the beneficiary or one that is partially taxable. Also, a beneficiary may receive a distribution without receiving a K-1 or having the requirement to include the amount on their 1040. Further, a beneficiary may under some circumstances receive a distribution from a pass-through entity that does not match the amount reported on the trust's K-1, resulting in tax to the trust on the difference.

The requirement to issue a K-1 depends on the trust document, the type of property distributed and whether the distribution is a specific bequest or a discretionary distribution, and the calculation of distributable net income (DNI). Advisers must consult the trust document and the rules carefully to determine the extent to which a distribution is taxable solely to the trust, solely to the beneficiary, or partially taxable to both.

Distributions to a trust from a partnership or pass-through entity present further challenges to fiduciary tax preparers. If the trust document is silent as to the allocation of pass-through income and distribution requirements, the UPIA requires the trustee to use good faith in estimating the amounts allocable to principal vs. allocable to income. Tax advisers need to understand the specific rules on the DNI treatment of distribution amounts on income received from a pass-through entity.

Listen as our experienced panel provides a practical guide to the challenges of completing and issuing a K-1 to trust beneficiaries.

Outline

  1. Rules for when a trust is required to issue a K-1
  2. Allocating taxable income amounts between trust and beneficiary in cases of trustee discretion to distribute
  3. Treatment of specific bequests
  4. Calculating allocation of trust income from pass-through entity between trust corpus and income

Benefits

The panel will discuss these and other important topics:

  • Differences in tax and K-1 treatment between specific bequests, formula bequests, and distributions made from trustee's discretion
  • K-1 reporting of income that is partially taxable to the trust and partially taxable to the beneficiary
  • Calculating taxable amounts on trust income from pass-through entities and how to report on beneficiary's K-1
  • Determining when a trust is required to issue a K-1

NASBA Details

Learning Objectives

After completing this course, you will be able to:

  • Identify the types of trust distributions that require the issuance of a K-1 and those that do not
  • Determine how to allocate trust income from pass-through entities between the trust and the beneficiary for purposes of issuing a K-1
  • Discern the reporting treatment to the beneficiary of specific bequests and substitutions of other property for bequests
  • Recognize how to allocate trust income from pass-through entities between principal and income and between trust and beneficiary

  • Field of Study: Taxes
  • Level of Knowledge: Intermediate
  • Advance Preparation: None
  • Teaching Method: Seminar/Lecture
  • Delivery Method: Group-Internet (via computer)
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
  • Prerequisite: Three years+ business or public firm experience at mid-level within the organization, involved in complex estate planning, tax forms and schedules; Supervising other preparers/accountants. Specific knowledge and understanding of tax reporting of trust income for various types of assets held in trust; familiarity with calculating distributable net income and the "65-day rule" of IRC 663(b).

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).