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income allocable to charitable distributions

the information. We need it to ensure that

Line 19a—Adjusted Gross Income

by including on line 2 both tax-exempt

you are complying with these laws and to

(AGI)

income and the difference between

allow us to figure and collect the right

If the estate or trust doesn’t own a CFC or

adjusted total income and the trust's net

amount of tax.

PFIC, enter its AGI for regular income tax

investment income (Form 8960, line 18a).

You are not required to provide the

purposes. See the instructions for Form

information requested on a form that is

1041, line 15c and Form 1041-QFT,

The amount of the deduction for

subject to the Paperwork Reduction Act

line 10.

net investment income distributed

TIP

unless the form displays a valid OMB

to beneficiaries should equal the

control number. Books or records relating

sum of net investment income reported to

If the estate or trust owns a CFC or

to a form or its instructions must be

the beneficiaries on their respective

PFIC, it may need to make adjustments.

retained as long as their contents may

Schedules K-1 (Form 1041).

See

Line 13—Modified Adjusted Gross

become material in the administration of

Income

(MAGI), earlier.

any Internal Revenue law. Generally, tax

Note. In general, the deduction for

returns and return information are

distributions of net investment income

Line 19b—Highest Tax Bracket for

confidential, as required by section 6103.

may not exceed the taxable income

Estates and Trusts

The time needed to complete and file

distributed to the beneficiary for regular

See the instructions for Form 1041,

this form will vary depending on individual

income tax purposes. However, in the

Schedule G, line 1a and the instructions

circumstances. The estimated average

case of an estate or trust that owns an

for Form 1041-QFT, line 13 for the dollar

time is:

interest in certain CFCs or PFICs, the

amount at which the highest tax bracket

distribution of net investment income can

begins for the tax year and enter that

exceed the distribution of taxable income

Recordkeeping

1 hr., 1 min.

. . . .

amount here.

when the amount of distributions exceed

Learning about

distributable net income for regular

the law or the

income tax purposes.

In the case of a QFT, see

Special

form

6 hr., 4 min.

computational rules for qualified funeral

. . . . . . . . . . . .

Form 1041, Schedule B, can be

trusts

(QFTs), earlier, to determine the

Preparing the

used as a worksheet to calculate

TIP

amount to report on Form 8960, line 19b.

form

1 hr., 47 min.

. . . . . . . . . . . .

the income distribution deduction

Copying, assembling,

for NIIT purposes by replacing line 1 with

Line 21—Net Investment Income

and sending the form

the trust's net investment income (Form

Tax for Estates and Trusts

to the IRS

20 min.

8960, line 18a) and including on line 2

. . . . . . . .

both adjusted tax-exempt interest and the

Form 1041 filers: Include this amount

difference between line 1 and the trust's

on Form 1041, Schedule G, line 4, and

net investment income (Form 8960,

see the instructions there.

Comments. You can submit

line 18a).

Form 1041-QFT filers: Include this

comments at

IRS.gov/uac/comment-on-

amount on Form 1041-QFT, line 16, and

tax-forms-and-publications

or by sending

see the instructions there.

them to the Internal Revenue Service, Tax

Line 18c—Undistributed Net

Forms and Publications Division, 1111

Investment Income

Paperwork Reduction Act Notice. We

Constitution Ave. NW, IR-6526,

Don’t enter a negative number. If negative,

ask for the information on this form to carry

Washington, DC 20224. DO NOT SEND

enter zero.

out the Internal Revenue laws of the

THE FORM TO THIS ADDRESS.

United States. You are required to give us

Instructions for Form 8960 (2017)

-20-

Instructions For Form 8960 - Net Investment Income Tax - Individuals, Estates, And Trusts - 2017 Page 20

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