Form 1041-QFT (2019)
Page 2
General Instructions
Section references are to the Internal
Revenue Code.
What’s New
Tax rate schedule for trusts and estates.
The tax rates have changed for 2019. See
Line 12—Tax, later.
Future Developments
For the latest information about developments
related to Form 1041-QFT and its instructions,
such as legislation enacted after they were
published, go to www.irs.gov/Form1041QFT.
Reminders
Global intangible low-taxed income. The
Tax Cuts and Jobs Act of 2017 (TCJA) (P.L.
115-97) requires a U.S. shareholder of any
controlled foreign corporation to include in
gross income its global intangible low-taxed
income (GILTI). For more information, see the
instructions for line 4, Other Income, later.
Deferred foreign income tax. The TCJA
requires a U.S. shareholder to pay a transition
tax on the untaxed foreign earnings of certain
specified foreign corporations as if those
earnings had been repatriated to the United
States. For more information, see Pub. 5292,
How to Calculate Section 965 Amounts and
Elections Available to Taxpayers.
Miscellaneous itemized deductions subject
to the 2% floor. Expenses that qualify as
miscellaneous itemized deductions subject to
the 2% floor are no longer deductible.
Net investment income tax (NIIT). An estate
or trust may be subject to NIIT. NIIT is a 3.8%
tax on the lesser of an estate’s or trust’s
undistributed net investment income or the
excess of the estate’s or trust’s adjusted
gross income over a specified threshold
amount. NIIT may need to be included when
figuring estimated tax. In addition, there are
special rules when figuring NIIT for a
composite return. See Composite Return,
later.
Purpose of Form
The trustee of a trust that has elected to be
taxed as a qualified funeral trust (QFT) files
Form 1041-QFT to report the income,
deductions, gains, losses, and tax liability of
the QFT. The trustee can use the form to
report information for a single QFT or for
multiple QFTs having the same trustee. If filing
Form 1041-QFT for multiple QFTs, please see
the rules discussed under Composite Return,
later.
Pre-need funeral trusts that don’t qualify as
QFTs should see the Instructions for Form
1041, U.S. Income Tax Return for Estates and
Trusts, for their filing requirements.
Qualified Funeral Trust
A QFT is a domestic trust that meets all of
the following requirements.
• The trust arose as a result of a contract with
a person engaged in the trade or business of
providing funeral or burial services or property
to provide such services.
•
The sole purpose of the trust is to hold,
invest, and reinvest funds in the trust and to use
those funds solely to pay for funeral or burial
services or property to provide such services
for the benefit of the beneficiaries of the trust.
• The only beneficiaries of the trust are
individuals for whom such services or
property are to be provided at their death
under the contracts described above.
• The only contributions to the trust are
contributions by or for such beneficiaries’
benefit.
• The trustee makes or previously had made
the election to treat the trust as a QFT.
• The trust would have been treated as owned
by the purchasers of the contracts under the
grantor trust provisions of the Code if the QFT
election hadn’t been made.
Note: A trust that isn’t treated as owned by the
purchaser solely because of the death of an
individual will be treated as meeting this
requirement during the 60-day period
beginning on the date of that individual’s death.
If a QFT has multiple beneficiaries, each
beneficiary’s separate interest under a
contract is treated as a separate QFT for the
purpose of figuring the tax and filing this
return. Each beneficiary’s share of the trust’s
income is determined in accordance with the
beneficiary’s interest in the trust. A
beneficiary’s interest in a trust may be
determined under any reasonable method.
Whenever these instructions refer to a trust
or QFT, it includes such separate interests
that are treated as separate QFTs.
Making the Election
The trustee makes the election to treat a trust
as a QFT by filing Form 1041-QFT for the
trust by the due date (including extensions).
You may elect QFT status for a trust’s first
eligible year or for any subsequent year. Once
made, the election can’t be revoked without
the consent of the IRS.
Composite Return
A trustee may file a single, composite Form
1041-QFT for some or all QFTs of which he or
she is the trustee, including QFTs that had a
short tax year.
You must attach a statement to a
composite Form 1041-QFT that includes the
following information for each QFT (or
separate interest treated as a separate QFT).
• The name of the owner or the beneficiary. If
you list the name of the owner and that trust
has more than one beneficiary, you must
separate the trust into shares held by the
separate beneficiaries.
• The type and gross amount of each type of
income earned by the QFT for the tax year.
For capital gains, identify separately the
amount of (a) net short-term capital gain, (b)
net long-term capital gain, (c) 28% rate gain,
and (d) unrecaptured section 1250 gain.
• The type and amount of each deduction and
credit allocable to the QFT.
• The tax and payments made for each QFT.
• The termination date for each QFT that was
terminated during the year.
Note: When calculating NIIT for a composite
return, treat each beneficiary’s interest in each
QFT (within the meaning of section 685) as a
separate trust.
When To File
File Form 1041-QFT by April 15, 2020. The
due date for a composite return is also April
15, 2020, even if the return includes QFTs that
terminated during the year. If you are filing for
a short year, file Form 1041-QFT by the 15th
day of the 4th month following the close of
the short year. If the due date falls on a
Saturday, Sunday, or a legal holiday, file by
the next business day.
Private Delivery Services (PDSs)
You can use certain PDSs designated by the
IRS to meet the
“
timely mailing as timely
filing
”
rule for tax returns. Go to www.irs.gov/
PDS for the current list of designated services.
The PDSs can tell you how to get written
proof of the mailing date.
For the IRS mailing address to use if you’re
using a PDS, go to www.irs.gov/
PDSStreetAddresses.
▲
!
CAUTION
PDSs can’t deliver items to P.O.
boxes. You must use the U.S.
Postal Service to mail any item to
an IRS P.O. box address.
Extension of Time To File
Use Form 7004, Application for Automatic
Extension of Time To File Certain Business
Income Tax, Information, and Other Returns,
to get an extension of time to file. An
extension of time to file a return doesn’t
extend the time to pay the tax.
Where To File
File Form 1041-QFT at the following address.
Department of Treasury
Internal Revenue Service
Kansas City, MO 64999
Who Must Sign
Trustee
The trustee, or an authorized representative,
must sign Form 1041-QFT.
Paid Preparer
Generally, anyone who is paid to prepare a
tax return must sign the return and fill in the
other blanks in the Paid Preparer Use Only
area of the return. The person required to sign
the return must:
• Complete the required preparer information,
• Sign it in the space provided for the
preparer’s signature, and
• Give you a copy of the return in addition to
the copy to be filed with the IRS.
Anyone who is paid to prepare the trust’s
return must enter their PTIN in the Paid
Preparer Use Only section. The PTIN entered
must have been issued after September 27,
2010. For information, see Form W-12, IRS
Paid Preparer Tax Identification Number
(PTIN) Application and Renewal.