Fillable Form 4970 - Tax On Accumulation Distribution Of Trusts

Form 4970 (2015)

Page

General Instructions

Line 1. For a nonresident alien or foreign

To refigure these credits, you must consider

corporation, include only the part of the

changes to the tax before credits for each of the

Section references are to the Internal Revenue

accumulation distribution that is attributable to

3 computation years due to previous

Code unless otherwise noted.

U.S. sources or is effectively connected with a

accumulation distributions.

trade or business carried on in the United States.

Future Developments

If the accumulation distribution is from a

Line 2. Enter any amount from line 1 that

domestic trust that paid foreign income taxes,

For the latest information about developments

represents UNI of a domestic trust accumulated

the limitation on the foreign tax credit under

related to Form 4970 and its instructions, such

before you were born or reached age 21.

section 904 is applied separately to the

as legislation enacted after they were published,

However, if the multiple trust rule applies, see the

accumulation distribution. If the distribution is

go to

instructions for line 4.

from a foreign trust, see sections 667(d) and 904

Purpose of Form

(f)(4) for special rules.

Line 4. Multiple trust rule. If you received

accumulation distributions from two or more

Attach the proper form for any credit you

A beneficiary of certain domestic trusts (see

other trusts that were considered to have been

refigure. The amount determined for items on

Who Must File below) uses Form 4970 to figure

made in any of the earlier tax years in which the

this line is limited to tax law provisions in effect

the partial tax on accumulation distributions

current accumulation distribution is considered

for those years involved.

under section 667. The fiduciary notifies the

to have been made, do not include on line 4 the

Line 22. For each year entered in Part II, columns

beneficiary of an “accumulation distribution” by

taxes attributable to the current accumulation

a-c, use and attach that year’s Form 4626,

completing Part IV of Schedule J (Form 1041).

distribution considered to have been distributed

Alternative Minimum Tax—Corporations, Form

If you received a distribution for this tax year

in the same earlier tax year(s).

6251, Alternative Minimum Tax—Individuals or

from a trust that accumulated its income instead

For this special rule, only count as trusts those

Schedule I (Form 1041), Alternative Minimum

of distributing it each year (and the trust paid

trusts for which the sum of this accumulation

Tax—Estates and Trusts to recompute the AMT

taxes on that income), you must complete Form

distribution and any earlier accumulation

for that year. Show any change in the AMT below

4970 to compute any additional tax liability. The

distributions from the trust, which are considered

the bottom margin of the appropriate form or

trustee must give you a completed Part IV of

under section 666(a) to have been distributed in

schedule and enter the change on line 22.

Schedule J (Form 1041) so you can complete

the same earlier tax year(s), is $1,000 or more.

Line 28. If estate taxes or generation-skipping

this form.

Foreign trust. If the trust is a foreign trust, see

transfer taxes apply to the accumulation

If you received accumulation distributions from

section 665(d)(2).

distribution, reduce the partial tax proportionately

more than one trust during the current tax year,

for those taxes. See section 667(b)(6) for the

Line 8. You can determine the number of years

prepare a separate Form 4970 for each trust

computation.

in which the UNI is deemed to have been

from which you received an accumulation

distributed by counting the “throwback years”

Individuals. Include the amount from this line on

distribution. You can arrange the distributions in

for which there are entries on lines 32 through 36

Form 1040, line 60. Write “ADT” to the left of the

any order you want them considered to have

of Part IV of Schedule J (Form 1041). These

line 60 entry space.

been made.

throwback rules apply even if you would not

Trusts and decedents’ estates. Include the

Who Must File

have been entitled to receive a distribution in the

amount on Form 1041, Schedule G, line 7. Write

earlier tax year if the distribution had actually

Beneficiaries who received an accumulation

“From Form 4970” and the amount of the tax to

been made then. There can be more than 5

distribution from certain domestic trusts that

the left of the line 7 entry space.

“throwback years.”

were created before March 1, 1984, must file

Other filers. Add the result to the total tax

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

Line 11. From the number of years entered on

liability before the refundable credits on your

line 8, subtract any year in which the distribution

Foreign trust beneficiaries. If you received an

income tax return for the year of the

from column (a), Part IV of Schedule J (Form

accumulation distribution from a foreign trust,

accumulation distribution. Attach this form to

1041) is less than the amount on line 10 of Form

you must report the distribution and the partial

that return.

4970. If the distribution for each throwback year

tax on a 2015 Form 3520, Annual Return To

is more than line 10, then enter the same number

Report Transactions With Foreign Trusts and

Paperwork Reduction Act Notice. We ask for

on line 11 as you entered on line 8.

Receipt of Certain Foreign Gifts.

the information on this form to carry out the

Line 13. Enter your taxable incomes for years

Internal Revenue laws of the United States. You

Do not file Form 4970 for distributions from

2010-2014, even if less than 5 years of the trust

are required to give us the information. We need

any foreign trusts, except to attach it as a

had accumulated income after you became 21.

it to ensure that you are complying with these

worksheet to Form 3520 if those instructions

Use the taxable income as reported by you or as

laws and to allow us to figure and collect the

direct you to.

changed by the IRS. Include in the taxable

right amount of tax.

Note: If the accumulation distributions are from a

income amounts considered distributed in that

You are not required to provide the information

domestic trust that used to be a foreign trust, see

year as a result of prior accumulation

requested on a form that is subject to the

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

distributions, whether from the same or another

Paperwork Reduction Act unless the form

Definitions

trust, and whether made in an earlier year or the

displays a valid OMB control number. Books or

current year.

records relating to a form or its instructions must

Undistributed net income (UNI). Undistributed

If your taxable income as adjusted is less than

be retained as long as their contents may

net income is the distributable net income (DNI)

zero, enter zero.

become material in the administration of any

of the trust for any tax year less (1) the amount of

Internal Revenue law. Generally, tax returns and

income required to be distributed currently and

Line 17. Figure the income tax (excluding any

return information are confidential, as required by

any other amounts properly paid or credited or

alternative minimum tax (AMT)) on the income on

section 6103.

required to be distributed to beneficiaries in the

line 16 using the tax rates in effect for your

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 form

attributable to such DNI.

three columns. Use the Tax Rate Schedules, etc.,

will vary depending on individual circumstances.

as applicable. You can get the Tax Rate

The estimated burden for individual taxpayers

Accumulation distribution. An accumulation

Schedules and prior year forms from many IRS

filing this form is approved under OMB control

distribution is the excess of amounts properly

offices by calling 1-800-TAX-FORM

number 1545-0074 and is included in the

paid, credited, or required to be distributed

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

estimates shown in the instructions for their

(other than income required to be distributed

IRS.gov.

individual income tax return. The estimated

currently) over the DNI of the trust reduced by

burden for all other taxpayers who file this form is

income required to be distributed currently.

Line 18. Enter your income tax (excluding any

shown below.

AMT) as originally reported, corrected, or

Generally, except for tax-exempt interest, the

amended, before reduction for any credits for

Learning about the

distribution loses its character upon distribution

your particular earlier year shown in each of the

law or the form .

13 min.

to the beneficiary. See section 667(d) for special

three columns.

rules for foreign trusts.

Preparing the form .

52 min.

Line 20. Nonrefundable credits that are limited to

Copying, assembling,

Specific Instructions

tax liability, such as the general business credit,

and sending the form to the IRS .

20 min.

may be changed because of an accumulation

Item E—Type of trust. If you received an

If you have comments concerning the

distribution. If the total allowable credits for any

accumulation distribution from a foreign trust,

accuracy of these time estimates or suggestions

of the 3 computation years increase, enter the

see Foreign trust beneficiaries above. Do not file

for making this form simpler, we would be happy

increase on line 20. However, do not treat as an

this form other than as an attachment to Form

to hear from you. See the instructions for the tax

increase the part of the credit that was allowable

3520.

return with which this form is filed.

as a carryback or carryforward credit in the

current or any preceding year other than the

computation year.

Form 4970 - Tax On Accumulation Distribution Of Trusts - 2015 Page 2

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