Instructions For Form 8939 - Allocation Of Increase In Basis For Property Acquired From A Decedent - 2010 Page 11

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How To Complete Schedule R-1
To avoid application of the
Justice for civil or criminal litigation, and
!
deemed allocation rules, Schedule
to cities, states, the District of Columbia,
Line 4. Do not enter more than the
R should be filed to allocate the
and U.S. commonwealths or possessions
CAUTION
amount on line 3. If you wish to allocate
exemption to trusts that may later have
for use in administering their tax laws. We
an additional GST exemption, you must
taxable terminations or distributions under
may also disclose this information to other
use Schedule R, Part 1. Making an entry
section 2612 even if the form is not
countries under a tax treaty, to federal
on line 4 constitutes a Notice of Allocation
required to be filed to report GST tax.
and state agencies to enforce federal
of the decedent’s GST exemption to the
nontax criminal laws, or to federal law
Line 8, column C. Enter the GST
trust.
enforcement and intelligence agencies to
exemption included on lines 2 through 5
Filing Schedule R-1. Attach to Form
combat terrorism. Failure to provide this
of Part 1 of Schedule R, and discussed
8939 one copy of each Schedule R-1 that
information, or providing false information,
above, that was allocated to the trust.
you prepare. Send two copies of each
may subject you to penalties.
Line 8, column D. Allocate the
Schedule R-1 to the fiduciary.
The time needed to complete and file
amount on line 7 of Part 1 of Schedule R
this form and related schedules will vary
in line 8, column D. Value the trust as of
Privacy Act and Paperwork Reduction
depending on individual circumstances.
the date of death. You should inform the
Act Notice. We ask for the information
The estimated average times are:
trustee of each trust listed on line 8 of the
on this form to carry out the Internal
total GST exemption you allocated to the
Revenue laws of the United States. You
Recordkeeping . . . . . . . 20 hrs., 34
trust. The trustee will need this
are required to give us the information.
min.
information to compute the GST tax on
We need it to ensure that you are
future distributions and terminations.
complying with these laws and to allow us
Learning about the law
8 hrs., 37
Line 8, column E. Trust’s inclusion
to figure and collect the right amount of
or the form . . . . . . . . . . min.
ratio. The trustee must know the trust’s
tax. Subtitle A and section 6109, and the
Preparing the form . . . . 19 hrs., 34
regulations require you to provide this
inclusion ratio to figure the trust’s GST tax
min.
information.
for future distributions and terminations.
You are not required to inform the trustee
You are not required to provide the
Copying, assembling,
of the inclusion ratio and may not have
information requested on a form that is
and sending the form to
2 hrs., 57
enough information to compute it.
subject to the Paperwork Reduction Act
the IRS . . . . . . . . . . . . . min.
Therefore, you are not required to make
unless the form displays a valid OMB
an entry in column E. However, column E
control number. Books or records relating
If you have comments concerning the
and the worksheet below are provided to
to a form or its instructions must be
accuracy of these time estimates or
assist you in computing the inclusion ratio
retained as long as their contents may
suggestions for making this form simpler,
for the trustee if you wish to do so.
become material in the administration of
we would be happy to hear from you. You
any Internal Revenue law. Generally, tax
You should inform the trustee of the
can write to the Internal Revenue Service,
returns and return information are
amount of the GST exemption you
Tax Products Coordinating Committee,
confidential as required by section 6103.
allocated to the trust. Line 8, columns C
SE:W:CAR:MP:T:M:S, 1111 Constitution
However, section 6103 allows or requires
and D may be used to compute this
Ave. NW, IR-6526, Washington, DC
the Internal Revenue Service to disclose
amount for each trust.
20224. Do not send the tax form to this
information from this form in certain
address. Instead, see Where To File.
Note. This worksheet will compute an
circumstances. For example, we may
accurate inclusion ratio only if the
disclose information to the Department of
decedent was the only settlor of the trust.
You should use a separate worksheet for
each trust (or separate share of a trust
that is treated as a separate trust).
WORKSHEET (inclusion ratio):
1 Total FMV of all of the property
interests that passed to the trust
2 State death taxes and other
charges actually recovered from
the trust . . . . . . . . . . . . . . . . .
3 Subtract line 2 from line 1 . . . . .
4 Add columns C and D of line 8 . .
5 Divide line 4 by line 3 . . . . . . . .
6 Trust’s inclusion ratio. Subtract
line 5 from 1.000 . . . . . . . . . . .
-10-

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