Fillable Form 4970 - Tax On Accumulation Distribution Of Trusts

Form 4970 (2017)

Page

General Instructions

accumulation distribution that is attributable

To refigure these credits, you must consider

to U.S. sources or is effectively connected

changes to the tax before credits for each of

Section references are to the Internal Revenue

with a trade or business carried on in the

the 3 computation years due to previous

Code unless otherwise noted.

United States.

accumulation distributions.

Line 2. Enter any amount from line 1 that

If the accumulation distribution is from a

Future Developments

represents UNI of a domestic trust

domestic trust that paid foreign income taxes,

For the latest information about developments

accumulated before you were born or

the limitation on the foreign tax credit under

related to Form 4970 and its instructions,

reached age 21. However, if the multiple trust

section 904 is applied separately to the

such as legislation enacted after they were

rule applies, see the instructions for line 4.

accumulation distribution. If the distribution is

published, go to

from a foreign trust, see sections 667(d) and

Line 4. Multiple trust rule. If you received

904(f)(4) for special rules.

Purpose of Form

accumulation distributions from two or more

other trusts that were considered to have been

Attach the proper form for any credit you

A beneficiary of certain domestic trusts (see

made in any of the earlier tax years in which

refigure. The amount determined for items on

Who Must File below) uses Form 4970 to

the current accumulation distribution is

this line is limited to tax law provisions in

figure the partial tax on accumulation

considered to have been made, don’t include

effect for those years involved.

distributions under section 667. The fiduciary

on line 4 the taxes attributable to the current

Line 22. For each year entered in Part II,

notifies the beneficiary of an “accumulation

accumulation distribution considered to have

columns a–c, use and attach that year’s Form

distribution” by completing Part IV of

been distributed in the same earlier tax year(s).

4626, Alternative Minimum Tax—

Schedule J (Form 1041).

For this special rule, only count as trusts

Corporations; Form 6251, Alternative

If you received a distribution for this tax

those trusts for which the sum of this

Minimum Tax—Individuals; or Schedule I

year from a trust that accumulated its income

accumulation distribution and any earlier

(Form 1041), Alternative Minimum Tax—

instead of distributing it each year (and the

accumulation distributions from the trust,

Estates and Trusts, to recompute the AMT for

trust paid taxes on that income), you must

which are considered under section 666(a) to

that year. Show any change in the AMT below

complete Form 4970 to compute any

have been distributed in the same earlier tax

the bottom margin of the appropriate form or

additional tax liability. The trustee must give

year(s), is $1,000 or more.

schedule and enter the change on line 22.

you a completed Part IV of Schedule J (Form

Foreign trust. If the trust is a foreign trust,

Line 28. If estate taxes or generation-skipping

1041) so you can complete this form.

see section 665(d)(2).

transfer taxes apply to the accumulation

If you received accumulation distributions

distribution, reduce the partial tax

Line 8. You can determine the number of

from more than one trust during the current

proportionately for those taxes. See section

years in which the UNI is deemed to have

tax year, prepare a separate Form 4970 for

667(b)(6) for the computation.

been distributed by counting the “throwback

each trust from which you received an

years” for which there are entries on lines 32

Individuals. Include the amount from this line

accumulation distribution. You can arrange

through 36 of Part IV of Schedule J (Form

on Form 1040, line 62. Write “ADT” to the left

the distributions in any order you want them

1041). These throwback rules apply even if

of the line 62 entry space.

considered to have been made.

you wouldn’t have been entitled to receive a

Trusts and decedents’ estates. Include the

Who Must File

distribution in the earlier tax year if the

amount on Form 1041, Schedule G, line 7.

distribution had actually been made then.

Beneficiaries who received an accumulation

Write “From Form 4970” and the amount of

There can be more than 5 “throwback years.”

distribution from certain domestic trusts that

the tax to the left of the line 7 entry space.

were created before March 1, 1984, must file

Line 11. From the number of years entered on

Other filers. Add the result to the total tax

Form 4970. For details, see section 665(c).

line 8, subtract any year in which the

liability before the refundable credits on your

distribution from column (a), Part IV of

Foreign trust beneficiaries. If you received

income tax return for the year of the

Schedule J (Form 1041) is less than the

an accumulation distribution from a foreign

accumulation distribution. Attach this form to

amount on line 10 of Form 4970. If the

trust, you must report the distribution and the

that return.

distribution for each throwback year is more

partial tax on a 2017 Form 3520, Annual

than line 10, then enter the same number on

Return To Report Transactions With Foreign

Paperwork Reduction Act Notice. We ask

line 11 as you entered on line 8.

Trusts and Receipt of Certain Foreign Gifts.

for the information on this form to carry out

Line 13. Enter your taxable incomes for years

the Internal Revenue laws of the United

Don’t file Form 4970 for distributions from

2012–2016, even if less than 5 years of the

States. You are required to give us the

any foreign trusts, except to attach it as a

trust had accumulated income after you

information. We need it to ensure that you are

worksheet to Form 3520 if those instructions

became 21. Use the taxable income as

complying with these laws and to allow us to

direct you to.

reported by you or as changed by the IRS.

figure and collect the right amount of tax.

Note: If the accumulation distributions are

Include in the taxable income amounts

You aren’t required to provide the

from a domestic trust that used to be a foreign

considered distributed in that year as a result

information requested on a form that is

trust, see Rev. Rul. 91-6, 1991-1 C.B. 89.

of prior accumulation distributions, whether

subject to the Paperwork Reduction Act

Definitions

from the same or another trust, and whether

unless the form displays a valid OMB control

made in an earlier year or the current year.

number. Books or records relating to a form

Undistributed net income (UNI). UNI is the

If your taxable income as adjusted is less

or its instructions must be retained as long as

distributable net income (DNI) of the trust for

than zero, enter zero.

their contents may become material in the

any tax year less (1) the amount of income

administration of any Internal Revenue law.

Line 17. Figure the income tax (excluding any

required to be distributed currently and any

Generally, tax returns and return information

alternative minimum tax (AMT)) on the income

other amounts properly paid or credited or

are confidential, as required by section 6103.

on line 16 using the tax rates in effect for your

required to be distributed to beneficiaries in the

tax year and (2) the taxes imposed on the trust

particular earlier tax year shown in each of the

The time needed to complete and file this

three columns. Use the Tax Rate Schedules,

form will vary depending on individual

attributable to such DNI.

etc., as applicable. You can get the Tax Rate

circumstances. The estimated burden for

Accumulation distribution. An accumulation

Schedules and prior year forms from many

individual taxpayers filing this form is approved

distribution is the excess of amounts properly

IRS offices by calling 1-800-TAX-FORM

under OMB control number 1545-0074 and is

paid, credited, or required to be distributed

(1-800-829-3676), or by downloading them at

included in the estimates shown in the

(other than income required to be distributed

IRS.gov.

instructions for their individual income tax

currently) over the DNI of the trust reduced by

return. The estimated burden for all other

Line 18. Enter your income tax (excluding any

income required to be distributed currently.

taxpayers who file this form is shown below.

AMT) as originally reported, corrected, or

Generally, except for tax-exempt interest,

amended, before reduction for any credits for

Learning about the

the distribution loses its character upon

your particular earlier year shown in each of

law or the form

. . . . . . . 13 min.

distribution to the beneficiary. See section

the three columns.

667(d) for special rules for foreign trusts.

Preparing the form

. 52 min.

Line 20. Nonrefundable credits that are limited

Copying, assembling,

Specific Instructions

to tax liability, such as the general business

and sending the form to the IRS

. 20 min.

credit, may be changed because of an

Item E—Type of trust. If you received an

If you have comments concerning the

accumulation distribution. If the total allowable

accumulation distribution from a foreign trust,

accuracy of these time estimates or

credits for any of the 3 computation years

see Foreign trust beneficiaries, earlier. Don’t

suggestions for making this form simpler, we

increase, enter the increase on line 20.

file this form other than as an attachment to

would be happy to hear from you. See the

However, don’t treat as an increase the part of

Form 3520.

instructions for the tax return with which this

the credit that was allowable as a carryback or

form is filed.

Line 1. For a nonresident alien or foreign

carryforward credit in the current or any

corporation, include only the part of the

preceding year other than the computation year.

Form 4970 - Tax On Accumulation Distribution Of Trusts - 2017 Page 2

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