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F Private Delivery Services

K Attachments

Tax Board . If the trust wants to revoke the

authorization before it ends, notify the FTB in

California conforms to federal law regarding

If the QFT needs more space on the form or

writing or call 800 .852 .5711 .

the use of certain designated private delivery

schedules, attach separate sheets showing the

services to meet the “timely mailing as

H Accounting Period

information in the same order as on the printed

timely filing/paying” rule for tax returns and

form .

All QFTs must adopt a calendar year, even if the

payments . See federal Form 1041-QFT, for a

Enter the QFT’s FEIN on each sheet . Also, use

trust was on a fiscal year when it was a grantor

list of designated delivery services . If a private

sheets that are the same size as the forms and

trust .

delivery service is used, send the tax return to:

schedules and indicate clearly the line number

Estimated Tax Payments

FRANCHISE TAX BOARD

of the printed form to which the information

SACRAMENTO CA 95827

relates . Show the totals on the printed forms .

Generally, QFTs must make quarterly estimated

Private delivery services cannot deliver items

L Miscellaneous Items

tax payments . If they expect to owe more

to PO boxes . If using one of these services

than $500, get the 2014 Instructions for

to mail any item to the FTB, DO NOT use an

California law follows federal law in the area of

Form 541-ES . Use Form 541-ES to figure and

FTB PO box .

accounting methods .

pay estimated tax for the trust . Estimated tax

Liability for tax

is the amount of tax the trustee expects to owe

G Who Must Sign

The trustee is liable for payment of the tax .

for the year after subtracting the amount of any

Trustee

Failure to pay the tax may result in the trustee

tax withheld and the amount of any credits .

The trustee or an authorized representative

being held personally liable . See R&TC

Estimated tax liability is figured for the

must sign Form 541-QFT .

Sections 19071 and 19516 .

individual QFT, and not for a composite tax

Paid Preparer

Tax-exempt income

return taken as a whole .

Generally, anyone who is paid to prepare a tax

California does not tax:

J Interest and Penalties

return must sign the tax return and fill in the

• Interest on governmental obligations.

required information in the “Paid Preparer’s

Interest derived from bonds issued by

Interest

Use Only” area of the tax return . The person

California or its political subdivisions,

Interest will be charged on tax not paid by the

required to sign the tax return must apply all of

the federal government, the

due date, even if the tax return is filed by the

the following:

District of Columbia (issued before

extended due date .

• Complete the required paid preparer

December 24, 1973), or territories of the

Late filing of tax return

information .

United States is not taxable by California .

A penalty is assessed if the tax return is filed

• Sign it in the space provided for the

• Proceeds of insurance policies. In general,

after the due date (including extensions),

preparer’s signature .

a lump sum payable at the death of the

unless there was reasonable cause for filing

• Give the trustee or authorized

insured under a life insurance policy is

late . The penalty is 25% if the tax return is filed

representative a copy of the tax return in

excludable from gross income of the

after the extended due date . If the tax return is

addition to the copy to be filed with the FTB .

recipient .

filed more than 60 days after the extended due

• Miscellaneous items wholly exempt

Third Party Designee

date, the minimum penalty is $135 or 100% of

from tax. (1) Gifts (not received as a

If the trustee wants to allow the FTB to discuss

tax due on the tax return, whichever is less .

consideration for services rendered)

its 2013 tax return with the paid preparer who

Late payment of tax

and money or property acquired by

signed it, check the “Yes” box in the signature

A penalty is assessed for not paying tax by the

bequest, devise, or inheritance (but the

area of the tax return . This authorization

due date unless there was reasonable cause for

income derived therefrom is taxable); and

applies only to the individual whose signature

not paying on time . The penalty is 5% of the

(2) income, other than rent, derived by a

appears in the “Paid Preparer’s Use Only”

unpaid tax plus one-half of 1% for each month,

lessor of real property upon the termination

section of the tax return . It does not apply to

or part of a month, that the tax is late, up to a

of a lease, representing the value of such

the firm, if any, shown in that section .

maximum of 25% .

property attributable to buildings erected or

If the “Yes” box is checked, the trustee is

If a QFT is subject to both the penalty for

other improvements made by the lessee .

authorizing the FTB to call the paid preparer to

failure to file a timely tax return and the penalty

answer any questions that may arise during the

M General Summary of

for failure to pay the total tax by the due date,

processing of its tax return . The trustee is also

a combination of the two penalties may be

Treatment for Sourcing

authorizing the paid preparer to:

assessed, but the total will not exceed 25%

Income Items

• Give the FTB any information that is

of the unpaid tax . The FTB may waive the late

missing from the tax return .

payment penalty based on reasonable cause .

Nonbusiness

• Call the FTB for information about the

Reasonable cause is presumed when 90% of

• Interest and dividends generally have a

processing of the tax return or the status of

the tax shown on the tax return is paid by the

source at the taxpayer’s state of residence .

any related refund or payments .

original due date of the tax return .

• Gains or losses from sale/exchange of real

• Respond to certain FTB notices about math

If the QFT includes interest or any of these

property and tangible personal property

errors, offsets, and tax return preparation .

penalties with the payment, identify and

generally have a source where the property

The trustee is not authorizing the paid preparer

enter these amounts in the bottom margin of

is located .

to receive any refund check, bind the trustee to

Form 541-QFT . Do not increase the tax due on

• Income from intangible personal property

anything (including any additional tax liability),

line 34 or reduce the overpaid tax on line 35 by

generally has a source at the taxpayer’s

or otherwise represent the trust before the FTB .

the amount of the interest or penalty .

state of residence .

The authorization will automatically end no

Other penalties

• Rents and royalties generally have a source

later than the due date (without regard to

Other penalties may be imposed for a payment

where the property is located .

extensions) for filing the trust’s 2014 tax

returned by the QFT’s bank for insufficient

return . If the trust wants to expand the paid

funds, accuracy-related matters, or fraud .

preparer’s authorization, see form FTB 3520,

Power of Attorney Declaration for the Franchise

Page 2 Form 541-QFT Instructions 2013

Instructions For Form 541-Qft - California Income Tax Return For Qualified Funeral Trusts (Qfts) - 2013 Page 2

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