Updated July 22, 2015
Fiduciary Returns and Responsibilities Chicago Illinois
A fiduciary is a person who occupies a position of special trust towards another, holding trust property in which another has a beneficial title or interest. Fiduciaries also receive and control the income of beneficiaries. Trustees, executors, or certain receivers are considered fiduciaries.
However, a person who is an agent of another is not necessarily a fiduciary for federal income tax purposes even though a fiduciary relationship may exist.
The Fiduciary Income Tax Return or Return of Estate is Form 1041, The U.S. Income Tax Return for Estates and Trusts. This return must be filed by the fiduciary if
a – The estate has gross income in excess of $600 or more for the tax year
b – The trust, other than a trust exempt under the charitable code (Section 501 a) has any income
c – Any beneficiary of the estate or trust is a non-resident alien
d- or an individual’s bankruptcy estate under Chapter 7 or 11 of the bankruptcy code has income equal to or greater than the sum of the personal exemption amount plus the basic standard exemption for the applicable Form 1040.
When there is more than one fiduciary, the return may be filed by any one of them. The return must be filed by the fifteenth day of the fourth month following the end of the tax year. If the trust or estate has a calendar year end, then the income tax return Form 1041 is due by April 15th of the following year. Beneficiaries who receive either a distribution from the estate or trust for the year or who obtain any item with respect to the tax year must be issued a K-1 from the entity, and pay the appropriate individual income taxes.
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Chris@AccountingSolutionsltd.com
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Chris Amundson is the President of Accounting Solutions Ltd., a full service public accounting firm of Certified Public Accountants and Enrolled Agents handling the bookkeeping, accounting, tax preparation, and audit representation needs of Businesses, Estates, Trusts, and Upper Income Individuals.