09RoadKing wrote:Is there ever NIIT at the Estate level in the final year, or is that passed out to the beneficiaries?
. https://www.irs.gov/pub/irs-pdf/i1041.pdfDistributions on Net Investment In- come.
Nilodop wrote:Is OP asking whether the final year return would eliminate the NIIT because the net investment income is distributed? I think that is the case. See the instructions, startingb at the bottom of page 33,. https://www.irs.gov/pub/irs-pdf/i1041.pdfDistributions on Net Investment In- come.
09RoadKing wrote:Not being any kind of T&E expert, another question I have is what constitutes distribution of investment income.
Dennis2 wrote:I am unable to imagine a scenario where there is net investment income as well...♫
makbo wrote:Dennis2 wrote:I am unable to imagine a scenario where there is net investment income as well...♫
It was stated that there is $28K of investment income, surely a lot of it is net investment income. Do you agree that Form 8960 is required to be filed with this return, based on what we've been told?
09RoadKing wrote:A colleague who does a lot of T&E returns says net investment income is always zero on the final year of an estate return because it passes through to benes. If no NII, then no NIIT.
Who Must File
Attach Form 8960 to your return if your modified adjusted gross income (MAGI) is greater than the applicable threshold amount.
[...]
Application to Estates and Trusts
Domestic estates and trusts. The NIIT applies to estates and trusts that have undistributed net investment income and adjusted gross income (AGI) in excess of the threshold amount. The NIIT is 3.8% of the lesser of:
-The undistributed net investment income for the tax year, or
-The excess, if any, of AGI (as defined in section 67(e)) over the applicable threshold amount.
The applicable threshold amount is the dollar amount at which the highest tax bracket in section 1(e) begins for the tax year. See the instructions for Form 1041, Schedule G, line 1a, and the instructions for Form 1041-QFT, line 13, for the dollar amount at which the highest tax bracket begins for the tax year.
makbo wrote:09RoadKing wrote:A colleague who does a lot of T&E returns says net investment income is always zero on the final year of an estate return because it passes through to benes. If no NII, then no NIIT.
Ask your "colleague who does a lot of T&E returns" about whether Form 8960 would be required.
09RoadKing wrote:Her position is that 8960 is not required in the final year.
Doug M wrote:Here we have excess deductions on termination. How can there be any positive numbers on the final K-1's?
Doug M wrote:Everything is deemed distributed in a final return.
Doug M wrote:[...]Chay-this is threshold amount for requirements to file 8960. The applicable threshold amount is the dollar amount at which the highest tax bracket in section 1(e) begins for the tax year.
If there were positive net numbers, the numbers go out to the bene's in the final year and are dealt with on their personal return.
Here we have excess deductions on termination. How can there be any positive numbers on the final K-1's?
Why do you think there would not be any positive numbers on the final K-1s, of a first & last year Form 1041, with $28K of investment income?
The problem is that AGI for trust/estate does not show up directly anywhere on the Form 1041, most people I'm sure could not do the calculation from memory.
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