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Level 4
posted Feb 8, 2025 11:02:41 PM

Section B. “Nature of Liability and Tax Notices” on Form 56 for a Trust

For a Trust 1041 I would think “Income” would be checked but I am surprised that there is no “Trust” Box to be checked. In addition to “Income” would  “Other (describe)” also be checked and write in the word “Trust” or check “Estate” instead?

0 4 1908
4 Replies
Expert Alumni
Feb 9, 2025 8:00:13 AM

When you check the box on Section B Line 4 for Form 1041, you are stating that the "income" from Line 3 is for a trust. There is no need to mention a trust on Line 3 (there are no "trust" taxes, only income taxes for a trust).

Level 4
Feb 9, 2025 4:22:06 PM

Thanks! So in Section B why have an Estate as a choice when the type of an Estate is a choice in Section A? Estates also have Income which can be checked in Section B. Maybe it’s me but sometimes the way the IRS designs their tax forms is very confusing. Maybe I should say they way Congress designs them rather than the IRS. LOL.

Level 4
Feb 10, 2025 5:13:09 AM

@PatriciaV  What’s the Estate box for then? The 1041 form can  also be used for Estate Income! In other words in the case of a 1041 for an Estate Tax Return vs. a Trust one it doesn’t make sense that both Estate and Income would be checked if in Section A. Authority  “court appointment of testate estate (valid will exists)” was chosen. 

Expert Alumni
Feb 10, 2025 6:01:41 AM

Estate Tax in this context is a wealth-transfer tax, which is paid by the estate. This is different from income tax levied on the income of the estate.