Form 1041
Notes from two continuing-education courses on the fiduciary income tax — Form 1041: A Practical Guide (Hadges & Zollars, Thomson Reuters Checkpoint Learning, ten hours, ten chapters, written on 2019 law and the 2018 form) and Taxation of Trusts, Estates, and Decedents (DeScherer & Rodda, CeriFi, one hour, 2025 printing). The public pages on trusts, a death in the family and inherited property are for clients. These pages are the desk procedure behind them: how to get from a trust document and a stack of 1099s to a correct Schedule B and a set of K-1s.
What changed since the courses
| Brackets | 2026: 10% to $3,300; 24% to $11,700; 35% to $16,000; 37% above. Capital gains 0% to $3,300, 15% to about $16,250, 20% above. The course’s 2019 figures ($2,600 / $9,300 / $12,750) are stale throughout. |
| NIIT threshold | $16,000 for 2026 — the start of the 37% bracket. The course says $12,750. |
| Exemptions | $600 estate, $300 simple trust, $100 complex trust; standard deduction zero. Unchanged. |
| §67(g) | Miscellaneous itemized deductions are gone permanently under P.L. 119-21; both courses still say “through 2025.” §67(e) fiduciary costs remain deductible above the line. |
| Excess deductions | Settled by T.D. 9918 (2020) after the course went to print: §67(e) items pass to beneficiaries above the line, other itemized deductions as itemized, miscellaneous items are lost. K-1 box 11 codes changed to A–F. |
| SALT cap | Applies to trusts and estates as individuals: $40,400 for 2026, phasing down to $10,000 above $505,000 of MAGI check. The course has the $10,000 cap. |
| Excess business loss | Permanent; $256,000 for a trust or estate in 2026. The course has $250,000 and a 2025 sunset. |
| Bonus depreciation | 100% permanent for property acquired after January 19, 2025 — never on property acquired from a decedent. §179 never for a trust or estate. |
| Penalties | Minimum failure-to-file about $525 for returns due in 2026 (course: $210); per-K-1 penalty about $340 (course: $260) check. |
| AMT exemption | About $31,400, phasing out above about $104,800 for 2026 check (course: $25,000 / $83,500). |
| Unchanged | DNI mechanics, the tier rules, specific bequests, the 65-day rule, §645 and its applicable date, grantor trust triggers, §642(c), §691, the two-year estimated-tax holiday for estates, the 5½-month extension. |
Accounting income, taxable income and DNI
The tier system, specific bequests, separate shares
The six triggers, the three reporting methods, the IDGT
Who files, when, and Form 8855
The decedent’s last 1040 and income in respect of a decedent
§67(e), bundled fees, §642(g), taxes, interest, charity, NOL
Brackets, AMT, credits, NIIT, household employees
No SE tax, passive rules, §179, trusts as S shareholders
Excess deductions, carryovers, in-kind distributions, Form 1041-T
Every box, where it lands, and the penalties
Forms 56, 8855, 7004, 4810, 5495; estimates; penalties; statutes
DR 0105, residency, out-of-state munis, the principal and income act
One-liners from the study questions and the final exams
How the courses are organized
- Form 1041 course — Ch. 1 basic principles and filing requirements (parties, entity types, the grantor-trust reporting methods, due dates, §645); Ch. 2 income (splitting 1099s, business income, gains and losses, Schedule E, S stock in trusts, IRD); Ch. 3 deductions (interest, taxes, fiduciary fees, §642(c), NOL, §265, §67(e), §642(g)); Ch. 4 accounting income and the Uniform Principal and Income Act; Ch. 5 DNI and the distribution deduction; Ch. 6 the K-1; Ch. 7 tax computation, credits and NIIT; Ch. 8 penalties and estimated tax; Ch. 9 extensions, amended returns, statutes; Ch. 10 grantor trusts. Thirty study questions and a fifty-question final exam.
- Trusts, Estates and Decedents course — one chapter in ten sections: overview, income, deductions, the distribution deduction, taxation of beneficiaries, grantor trusts, charitable remainder trusts, terminations, estimated tax, decedents. Six study questions and a seven-question exam.
- The one-liners on the Quick Notes page come from both exams and both sets of study questions. The 1041 final was marked on the printout; where the mark did not survive scanning the answer was worked from the text and is tagged.
Sources used for the update
- P.L. 119-21 (July 4, 2025): §67(g) permanent; §164(b)(6) SALT cap; §461(l); §168(k); §199A
- Rev. Proc. 2025-32 (2026 inflation adjustments: brackets, AMT exemption, §6651 minimum, §6722) check
- T.D. 9918 (Reg. §§1.67-4, 1.642(h)-2, -5: excess deductions on termination)
- Form 1041, Schedule K-1 and Form 7004 instructions for 2025 (line and box references; verify against the 2026 forms when released) check
- Reg. §§1.641(b)-3, 1.643(a)-3, 1.645-1, 1.651(a)-1, 1.661(a)-2, 1.662(a)-2, 1.663(a)-1, 1.663(b)-1, 1.671-4, 1.1411-3; Uniform Principal and Income Act (2000, 2008 amendments) as adopted in Colorado, C.R.S. 15-1-401 et seq. check
Private reference, not client advice. Notes taken from two continuing-education courses: Form 1041: A Practical Guide (Hadges & Zollars, Thomson Reuters Checkpoint Learning, 10 hours, written on 2019 law) and Taxation of Trusts, Estates, and Decedents (DeScherer & Rodda, CeriFi, 2025 printing on 2024 law). Figures and rules brought current to 2026 in October 2026 (P.L. 119-21, Rev. Proc. 2025-32, T.D. 9918). Items tagged check are to be confirmed against primary sources before they are relied on.