Iowa Fiduciary Instructions For 2012
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2Iowa Fiduciary Instructions for 2012
General Instructions
Penalty for Failure to Timely Pay the Tax Due
Which Return to File
A penalty of 5% will be added to the tax due if the return was filed
An Iowa fiduciary return must be filed for estates, trusts, and other
timely but at least 90% of the correct tax is not paid by the due date.
entities that are taxed as trusts for federal income tax purposes.
The penalty can only be waived under limited circumstances.
An Iowa individual income tax return must be filed for:
Where the failure to file penalty and the failure to pay penalty are
applicable, the failure to file penalty will take precedence.
The decedent, if the income during the tax period ending with
Federal Tax Audits
death meets the Iowa resident or nonresident filing
The Department has six months to make a determination of the correct
requirements. Note: This return must be prepared with the
tax after receipt of sufficient written notice of the final disposition of
same method of accounting last used by the decedent.
any matter between the taxpayer and the Internal Revenue Service. A
Wards in guardianships or conservatorships.
copy of the federal document showing the final disposition of federal
Resident and nonresident beneficiaries of estates or trusts, if
adjustments must be attached to the notice in order to begin the 6-
the minimum filing requirements are met.
month period.
Required Documents to be filed with the IA 1041 Iowa
To constitute notice “sufficient to inform the Department” the notice
Fiduciary Return
must be in writing, supplied under separate cover and not as a part of
A copy of the federal fiduciary 1041 return and appropriate
the return for the current period, and have the federal documents
schedules must accompany each fiduciary return filed.
previously mentioned attached.
A copy of the decedent’s will must accompany the initial
Distributions
fiduciary return if the Department has not previously received
A distribution of property-in-kind to a beneficiary entitled to the
a copy for inheritance tax purposes.
income made after June 1, 1984, in taxable years ending after that date
A copy of inter vivos trust instruments must be filed with the
is subject to an election by the fiduciary to recognize any gain or loss
initial return for the trust.
in the estate or trust. The election is an affirmative act and failure to
If the will has been filed in Iowa probate proceedings, then
indicate whether or not the election is made will be construed as an
this instrument is not required to be filed with the initial
election by the fiduciary not to recognize any gain or loss on the
return of testamentary trusts.
distribution. The election applies to all distributions made during the
If the probate inventory has not been filed in Iowa probate
taxable year.
proceedings at the time the initial fiduciary return is filed, a
Return Instructions
statement should accompany the return advising when the
The following instructions are for completing the Iowa fiduciary
inventory will be filed.
return. Detailed instructions are provided for lines requiring special
A probate inventory for a foreign estate should be filed with
attention.
the return if an ancillary administration has not been opened
Return Identification
in Iowa.
Enter the beginning and ending dates if the return is for a fiscal year.
Note: The final fiduciary return serves as an application for a
Also enter the FEIN and the decedent’s SSN if applicable.
certificate of acquittance. You must check the boxes on the front of
Income (Lines 1-9)
the return requesting an income tax certificate of acquittance and
All income from the probate property owned by the decedent must
indicating whether an IA 706 will be filed. If no IA 706 will be
be reported until the property is sold or distributed, or disposition of
filed, please send a copy of the probate inventory or listing of
the property is made. Income derived from probate property should
assets to expedite processing.
also be reported if the income is deposited in an estate bank account
Also Note: Expenses of administration, executors’ commissions,
and expenses relating to the probate property are paid from estate
attorney fees, etc., are not allowable as an income tax deduction on
funds and controlled by the fiduciary. The income derived from non-
form IA 1041 if they were allowed as a deduction in computing the
probate property must be reported on the beneficiaries’ individual
taxable estate for federal estate tax purposes.
income tax returns.
Preparer’s ID Number
Line 2. Interest. Although exempt from federal tax, interest on state
Enter the preparer’s SSN, FEIN, or PTIN.
and municipal securities is taxable to Iowa with the following
When to File
exceptions:
The return with payment is due within four calendar months after the
Iowa Board of Regents Bonds
end of the taxable year. A fiduciary return must be filed for every
Iowa College Super Savings Plans Bonds
accounting period in which there is taxable income of $600 or more
Iowa Municipality Urban Renewal Bonds
Low Income Housing Bonds
and for the final accounting period regardless of income.
Warehouse Project Revenue Bonds
Where to File
Sewage Treatment Works Revenue Bonds
Mail the fiduciary return to:
Beginning Farmer Loan Program Bonds
Underground Storage Tank Fund Revenue Bonds
Fiduciary Return Processing, Iowa Department of Revenue, P.O. Box
Soil Conservation District Bonds
10467, Des Moines, Iowa 50306
Aviation Authority Bonds
PENALTY
E911 Emergency Telephone Service Program Bonds
Penalty for Failure to Timely File a Return
County Health Center Bonds
Iowa Rural Water District Revenue Bonds
A penalty of 10% will be added to the tax due for failure to timely
Quad Cities Interstate Metropolitan Authority Bonds
file a return if the return is not remitted by the due date and at least
Municipal Investment Recovery Program Bonds
90% of the correct tax is not paid by the due date. The penalty can
Local Government Flood Damage Program
only be waived under limited circumstances.
Prison Infrastructure Revenue Bonds
Iowa Utilities Board and Consumer Advocate Building Bonds
Honey Creek Premier Destination Park Tax-Exempt Bonds
Appropriation Bonds
63-002a (08/17/12)
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