Tax and Payments

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Tax and Payments

Line 22—Taxable Income

Minimum taxable income. Line 22 cannot be less than the larger of:
  • The inversion gain of the estate or trust, as figured under section 7874, if the estate or trust is an expatriated entity or a partner in an expatriated entity, or

  • 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.

NOL. If line 22 (figured without regard to the minimum taxable income rule stated above) is a loss, the estate or trust may have an NOL. Do not include the deductions claimed on lines 13, 18, and 20 when figuring the amount of the NOL.

Generally, an NOL may be carried back to the prior 2 tax years and forward for up to 20 years. The 2-year carryback period does not apply to the portion of an NOL attributable to an eligible loss; a farming loss; a qualified disaster, GO Zone, or disaster recovery assistance loss; or a specified liability loss. An estate or trust may also elect to carry an NOL forward only, instead of first carrying it back. For more information, see the Instructions for Form 1045, Application for Tentative Refund.

Complete Schedule A of Form 1045 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 details, see Pub. 536, Net Operating Losses (NOLs) for Individuals, Estates, and Trusts.

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 Schedule K-1 (Form 1041), box 11, codes D and E, later.

Excess deductions on termination. If the estate or trust has for its final year deductions (excluding the charitable deduction and exemption) in excess of its gross income, the excess is allowed as an itemized deduction to the beneficiaries succeeding to the property of the estate or trust.

In general, an unused NOL carryover that is allowed to beneficiaries (as explained above) cannot 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 Schedule K-1 (Form 1041), box 11, code A, later.

Line 24a—2012 Estimated Tax Payments and Amount Applied From 2011 Return

Enter the amount of any estimated tax payment you made with Form 1041-ES for 2012 plus the amount of any overpayment from the 2011 return that was applied to the 2012 estimated tax.

If the estate or trust is the beneficiary of another trust and received a payment of estimated tax that was credited to the trust (as reflected on the Schedule K-1 issued to the trust), then report this amount separately with the notation “section 643(g)” in the space next to line 24a and include this amount in the amount entered on line 24a.

Do not include on Form 1041 estimated tax paid by an individual before death. Instead, include those payments on the decedent's final income tax return.

Line 24b—Estimated Tax Payments Allocated to Beneficiaries

The trustee (or executor, for the final year of the estate) may elect under section 643(g) to have any portion of its estimated tax treated as a payment of estimated tax made by a beneficiary or beneficiaries. The election is made on Form 1041-T, Allocation of Estimated Tax Payments to Beneficiaries, which must be filed by the 65th day after the close of the trust's tax year. Form 1041-T shows the amounts to be allocated to each beneficiary. This amount is reported on the beneficiary's Schedule K-1 (Form 1041), box 13, using code A.

Attach Form 1041-T to your return only if you have not yet filed it; however, attaching Form 1041-T to Form 1041 does not extend the due date for filing Form 1041-T. If you have already filed Form 1041-T, do not attach a copy to your return.

Failure to file Form 1041-T by the due date (March 6, 2013, for calendar year estates and trusts) will result in an invalid election. An invalid election will require the filing of amended Schedules K-1 for each beneficiary who was allocated a payment of estimated tax.

Line 24d—Tax Paid With Form 7004

If you filed Form 7004 to request an extension of time to file Form 1041, enter the amount that you paid with the extension request.

Line 24e—Federal Income Tax Withheld

Use line 24e to claim a credit for any federal income tax withheld (and not repaid) by: (a) an employer on wages and salaries of a decedent received by the decedent's estate; (b) a payer of certain gambling winnings (for example, state lottery winnings); or (c) a payer of distributions from pensions, annuities, retirement or profit-sharing plans, IRAs, insurance contracts, etc., received by a decedent's estate or trust. Attach a copy of Form W-2, Form W-2G, or Form 1099-R to the front of the return.

Except for backup withholding (as explained below), withheld income tax cannot be passed through to beneficiaries on either Schedule K-1 or Form 1041-T.

Backup withholding. If the estate or trust received a 2012 Form 1099 showing federal income tax withheld (that is, backup withholding) on interest income, dividends, or other income, check the box and include the amount withheld on income retained by the estate or trust in the total for line 24e.

Report on Schedule K-1 (Form 1041), box 13, using code B, any credit for backup withholding on income distributed to the beneficiary.

Line 24f—Credit for Tax Paid on Undistributed Capital Gains

Attach Copy B of Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains.

Line 24g—Credit for Federal Tax on Fuels

Enter any credit for federal excise taxes paid on fuels that are ultimately used for nontaxable purposes (for example, an off-highway business use). Attach Form 4136, Credit for Federal Tax Paid on Fuels. See Pub. 510, Excise Taxes, for more information.

Line 26—Estimated Tax Penalty

If line 27 is at least $1,000 and more than 10% of the tax shown on Form 1041, or the estate or trust underpaid its 2012 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 under certain conditions. See Pub. 505, Tax Withholding and Estimated Tax, for details.

Line 27—Tax Due

You must pay the tax in full when the return is filed. You may pay by check or money order or by credit or debit card. Also, you may pay by EFTPS. For more information about EFTPS, see Electronic Deposits, earlier.

To pay by check or money order.
If you pay by check or money order:
  • 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 “2012 Form 1041” on the payment,

  • Consider completing the 2012 Form 1041-V, and

  • Enclose, but do not attach, the payment (and Form 1041-V, if completed) with Form 1041.

To pay by credit or debit card.
For information on paying your taxes electronically, including by credit or debit card, go to www.irs.gov/e-pay.

Line 29a—Credited to 2013 Estimated Tax

Enter the amount from line 28 that you want applied to the estate's or trust's 2013 estimated tax.