Reporting Charitable Bequests on Form 706 and Form 1041
Author: Klaralee R. Charlton
| CPE Credit: |
2 hours for CPAs
2 hours Federal Tax Related for EAs and OTRPs
2 hours Federal Tax Law for CTEC |
Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2026 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card
Taxpayers frequently incorporate charitable giving into their estate plans. These transfers can be drafted as dollar amounts, specific assets, or percentages of a residuary. When reporting these transfers on the Estate Tax Return, Form 706, practitioners must understand the reporting nuances particularly for percentage transfers which require a cumbersome circular calculation to accurately claim the charitable deduction. For estates and trusts requiring a Fiduciary Income Tax Return, Form 1041, practitioners must similarly understand how to review the governing documents and evaluate the type of transfer to accurately report the charitable income tax deduction. This course will evaluate both Form 706 and Form 1041 reporting of post-death charitable transfers.
Publication Date: June 2023
Designed For
Attorneys, CPAs, Enrolled Agents
Topics Covered
- Estate Tax Brief Recap
- Unlimited Charitable Deduction
- Specific Bequests vs. Percentage Bequests
- Discounting Charitable Bequests
- Fiduciary Tax Brief Recap
- Charitable Income Tax Deduction
- Qualifying Gross Income
- Qualifying Charitable Purpose
- Pursuant to the Governing Instrument
- Year of Deduction
Learning Objectives
- Recognize how to advise clients on the difference between specific bequests and residuary devises and the charitable deduction allowed for each
- Recognize how to analyze a taxpayer's ability to claim a charitable income tax deduction when preparing Form 1041
- Recognize how to calculate the proper charitable deduction when preparing Form 706 for specific bequests and residuary devises
- Identify the importance of properly drafting an estate plan to maximize the use of the charitable deduction
Level
Intermediate
Instructional Method
Self-Study
NASBA Field of Study
Taxes (2 hours)
Program Prerequisites
Basic understanding of Trust and Estate Taxation
Advance Preparation
None
