Form 1041-Qft - General Instructions - 2006 (Page 3 of 3) in pdf

Form 1041-QFT (2006)

Page

the left of the entry space, write the type and

dividend does not include: any dividend from

AGI is figured by subtracting from total

amount of the tax. Also attach to Form

a corporation if the corporation is (or was)

income on line 5 the total of the

1041-QFT any forms required to figure these

exempt from income tax under section 501 or

administrative costs on lines 7 through 9 to

taxes (for example Schedule I of Form 1041).

521 for the corporation’s current (or

the extent they are costs incurred in the

See the Instructions for Form 1041 for more

preceding) tax year during which the

administration of the QFTs that would not

details on additional taxes that may apply.

distribution was made; any amount allowed

have been incurred if the property were not

as a deduction under section 591; or any

held by the QFTs.

Line 16—Payments

dividend described under section 404(k).

If this is a composite return, you must

Include on line 16 any:

Exception. Some dividends may be reported

figure the AGI separately for each QFT using

to the trust as qualified dividends but are not

each QFT’s share of the amounts on the lines

Estimated tax payments made for 2006.

qualified dividends. See the instructions for

referred to above.

Tax paid with a request for an extension of

line 2b(2) in the 2006 Instructions for Form

time to file.

Line 13—Tax

1041 for more information.

Federal income tax withheld (for example,

Tax rate schedule. Unless the instructions

Line 4—Other Income

backup withholding).

below for Schedule D or Composite Return

Enter all other types of income not included

Credit for tax paid on undistributed capital

apply, figure the tax using the Tax Rate

on line 1a, 2a, or 3. List the type and amount

gains. Also attach Copy B of Form 2439,

Schedule below. Enter the tax on line 13.

on an attached schedule if the QFT(s) has

Notice to Shareholder of Undistributed

more than one item.

Long-Term Capital Gains.

2006 Tax Rate Schedule

Deductions

Line 17—Tax Due

taxable

Allocation of Deductions for Tax-Exempt

You must pay the tax in full when the return

income

Income

is filed. Make the check or money order

is:

But

Of the

payable to “United States Treasury.” Write the

not

amount

Generally, no deduction that would otherwise

EIN from line 2 of the form and “2006 Form

Over—

over—

Its tax is:

over—

be allowable is allowed for any expense that

1041-QFT” on the payment. Enclose, but do

$2,050

15%

is allocable to tax-exempt income, such as

not attach, the payment with Form 1041-QFT.

2,050

4,850

$307.50 + 25%

2,050

interest on state or local bonds.

4,850

7,400

1,007.50 + 28%

4,850

Exception. State income taxes and business

7,400

10,050

1,721.50 + 33%

7,400

Privacy Act and Paperwork Reduction Act

expenses that are allocable to tax-exempt

- - -

10,050

2,596.00 + 35%

10,050

Notice. We ask for the information on this

interest are deductible.

form to carry out the Internal Revenue laws of

Expenses that are directly allocable to

Schedule D. If the QFT had both a net

the United States. You are required to give us

tax-exempt income are allocable only to

capital gain and any taxable income, or any

this information. We need it to ensure that

tax-exempt income. A reasonable proportion

qualified dividends and any taxable income,

you are complying with these laws and to

of expenses indirectly allocable to both

complete Part V of Schedule D (Form 1041),

allow us to figure and collect the right amount

tax-exempt income and other income must

and enter the tax from line 35 of Schedule D.

of tax. Section 6109 requires return preparers

be allocated to each class of income.

Composite return. If this is a composite

to provide their identifying numbers on the

return.

Limitations on Deductions

return, check this box and enter on line 13

the total of the tax computed separately for

You are not required to provide the

Generally, the amount a QFT has “at risk”

each QFT using either the 2006 Tax Rate

information requested on a form that is

limits the loss it can deduct in any tax year.

Schedule above or Schedule D (Form 1041).

subject to the Paperwork Reduction Act

Also, section 469 and its regulations generally

unless the form displays a valid OMB control

limit losses from passive activities to the

Line 14—Credits

number. Books or records relating to a form

amount of income derived from all passive

Specify the type of credit being claimed and

or its instructions must be retained as long as

activities. Similarly, credits from passive

attach any required credit forms. If you are

their contents may become material in the

activities are generally limited to the tax

claiming more than one type of credit, attach

administration of any Internal Revenue law.

attributable to such activities.

a schedule listing the type and amount of

Generally, tax returns and return information

For details on these and other limitations

each credit claimed. See the Instructions for

are confidential, as required by section 6103.

on deductions, see Deductions in the

Form 1041 for details on the credits that may

The time needed to complete and file this

Instructions for Form 1041.

be claimed.

form will vary depending on individual

Line 9—Other Deductions Not Subject to

circumstances. The estimated average time

If the QFT paid the federal excise tax on

the 2% Floor

is:

nontaxable telephone service, it may be

Attach your own schedule, listing by type and

entitled to a credit for the tax. See Form

Recordkeeping

9 hr., 34 min.

amount all allowable deductions that are not

8913, Credit for Federal Telephone Excise

Learning about the law

deductible elsewhere on the form.

Tax Paid, and Notice 2006-50, 2006-25 I.R.B.

or the form

2 hr., 18 min.

1141, for more information. If the QFT can

QFTs are not allowed a deduction

claim the credit, complete Form 8913, attach

Preparing the form

5 hr., 20 min.

for a personal exemption.

it to the return, and include the credit on line

Copying, assembling,

CAUTION

14. On the dashed line to the left of the entry

and sending the form

space (or on the attached schedule, if

to the IRS

48 min.

Line 10—Allowable Miscellaneous Itemized

applicable), write “TETR.”

If you have comments concerning the

Deductions Subject to the 2% Floor

accuracy of these time estimates or

Also, the credit claimed may have to be

These deductions are deductible only to the

suggestions for making this form simpler, we

included in income. For more information, see

extent that the aggregate amount of such

would be happy to hear from you. You can

Notice 2006-50 and the instructions for Line

deductions exceeds 2% of adjusted gross

write to the Internal Revenue Service, Tax

8—Other Income in the 2006 Instructions for

income (AGI).

Products Coordinating Committee,

Form 1041.

Among the miscellaneous itemized

SE:W:CAR:MP:T:T:SP, 1111 Constitution Ave.

deductions that must be included on line 10

NW, IR-6406, Washington, DC 20224. Do not

Line 15—Net Tax

are expenses for the production or collection

send the tax form to this address. Instead,

of income, such as investment advisory fees.

see Where To File on page 2.

If the QFT owes any additional taxes (for

example, alternative minimum tax, recapture

taxes, etc.), include these taxes on line 15. To

Form 1041-Qft - General Instructions - 2006 Page 3

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