|
|
|
|
|
I just entered the preliminary information on Pro System and discovered that it wouldn't allow me to generate a Form 1041-A or 541-A for the state of California. Upon examination of Form 5227 it looks like the 2007 Form 5227 now incorporates the information for both the Form 5227 and Form 1041-A. The 2007 Form 5227 is now 7 pages. I can only get the draft form and I can't get any instructions for whether or not you now only have to file Form 5227 instead of the 1041-A and 5227. Does anybody know anything about this?
BTW. Starting with 2007 UBTI is handled differently for CRT's. In the past, UBTI would taint the whole trust and a Form 1041 would have to be filed. The new law is that you get a $1,000 exemption for UBTI. Any UBTI after that is taxed at 100%. There is finally a 100% tax out there.
|
|
|
|
|
Member
 
Group: Forum Members
Last Login: 12/23/2009 12:27:21 PM
Posts: 32,
Visits: 101
|
|
The 1041-A is now required of all CRTs effective 2007. There was an exception to this for CRT that were required to distribute all income currently, but this was repealed in 2006. A CRT must now file both 1041-A and the 5227 period.
Your comment about the 100% tax is interesting but apparently not as bad as it appears. Prior to the 100% tax on UBI if a CRT had any UBI it was determined to be a non exempt complex trust in a year UBI was received. If it was a year in which a substantially appreciated asset was sold it would be taxed on the whole amount income generated that year. This could a whole lot more than the UBI.
|
|
|
|
|
|
|
Actually the IRS just released the instructions for the 2007 Form 5227. It looks like the 1041-A does NOT need to be filed any more with Form 5227. Read under the "What's New" paragraph on Page 1.
http://www.irs.gov/pub/irs-pdf/i5227.pdf
|
|
|
|