Schedule J (Form 1041) - Accumulation Distribution for Certain Complex Trusts

General Instructions

Use Schedule J (Form 1041) to report an accumulation distribution for a domestic complex trust that was:

• Previously treated at any time as a foreign trust (unless an exception is provided in future regulations) or
• Created before March 1, 1984, unless that trust would not be aggregated with other trusts under the rules of section 643(f) if that section applied to the trust.

An accumulation distribution is the excess of amounts properly paid, credited, or required to be distributed (other than income required to be distributed currently) over the DNI of the trust reduced by income required to be distributed currently. To have an accumulation distribution, the distribution must exceed the accounting income of the trust.

Specific Instructions

Part I - Accumulation Distribution in 2002

Line 1 - Distribution Under Section 661(a)(2)

Enter the amount from Schedule B of Form 1041, line 10, for 2002. This is the amount properly paid, credited, or required to be distributed other than the amount of income for the current tax year required to be distributed currently.

Line 2 - Distributable Net Income

Enter the amount from Schedule B of Form 1041, line 7, for 2002. This is the amount of distributable net income (DNI) for the current tax year determined under section 643(a).

Line 3 - Distribution Under Section 661(a)(1)

Enter the amount from Schedule B of Form 1041, line 9, for 2002. This is the amount of income for the current tax year required to be distributed currently.

Line 5 - Accumulation Distribution

If line 11, Schedule B of Form 1041 is more than line 8, Schedule B of Form 1041, complete the rest of Schedule J and file it with Form 1041, unless the trust has no previously accumulated income.

Generally, amounts accumulated before a beneficiary reaches age 21 may be excluded by the beneficiary. See sections 665 and 667(c) for exceptions relating to multiple trusts. The trustee reports to the IRS the total amount of the accumulation distribution before any reduction for income accumulated before the beneficiary reaches age 21. If the multiple trust rules do not apply, the beneficiary claims the exclusion when filing Form 4970, Tax on Accumulation Distribution of Trusts, as you may not be aware that the beneficiary may be a beneficiary of other trusts with other trustees.

For examples of accumulation distributions that include payments from one trust to another trust, and amounts distributed for a dependent's support, see Regulations section 1.665(b)-1A(b).

Part II - Ordinary Income Accumulation Distribution

Enter the applicable year at the top of each column for each throwback year.

Line 6 - Distributable Net Income for Earlier Years

Enter the applicable amounts as follows:

Throwback year(s)	Amount from line
1969-1977	Schedule C, Form 1041, line 5
1978-1979	Form 1041, line 61
1980	Form 1041, line 60
1981-1982	Form 1041, line 58
1983-1996	Schedule B, Form 1041, line 9
1997-2001	Schedule B, Form 1041, line 7

For information about throwback years, see the instructions for line 13. For purposes of line 6, in figuring the DNI of the trust for a throwback year, subtract any estate tax deduction for income in respect of a decedent if the income is includible in figuring the DNI of the trust for that year.

Line 7 - Distributions Made During Earlier Years

Enter the applicable amounts as follows:

Throwback year(s)	Amount from line
1969-1977	Schedule C, Form 1041, line 8
1978	Form 1041, line 64
1979	Form 1041, line 65
1980	Form 1041, line 64
1981-1982	Form 1041, line 62
1983-1996	Schedule B, Form 1041, line 13
1997-2001	Schedule B, Form 1041, line 11

Line 11 - Prior Accumulation Distribution Thrown Back to any Throwback Year

Enter the amount of prior accumulation distributions thrown back to the throwback years. Do not enter distributions excluded under section 663(a)(1) for gifts, bequests, etc.

Line 13 - Throwback Years

Allocate the amount on line 5 that is an accumulation distribution to the earliest applicable year first, but do not allocate more than the amount on line 12 for any throwback year. An accumulation distribution is thrown back first to the earliest preceding tax year in which there is undistributed net income (UNI). Then, it is thrown back beginning with the next earliest year to any remaining preceding tax years of the trust. The portion of the accumulation distribution allocated to the earliest preceding tax year is the amount of the UNI for that year. The portion of the accumulation distribution allocated to any remaining preceding tax year is the amount by which the accumulation distribution is larger than the total of the UNI for all earlier preceding tax years.

A tax year of a trust during which the trust was a simple trust for the entire year is not a preceding tax year unless (a) during that year the trust received outside income or (b) the trustee did not distribute all of the trust's income that was required to be distributed currently for that year. In this case, UNI for that year must not be more than the greater of the outside income or income not distributed during that year.

The term outside income means amounts that are included in the DNI of the trust for that year but that are not income of the trust as defined in Regulations section 1.643(b)-1. Some examples of outside income are: (a) income taxable to the trust under section 691; (b) unrealized accounts receivable that were assigned to the trust; and (c) distributions from another trust that include the DNI or UNI of the other trust.

Line 16 - Tax-Exempt Interest Included on Line 13

For each throwback year, divide line 15 by line 6 and multiply the result by the following:

Throwback year(s)	Amount from line
1969-1977	Schedule C, Form 1041, line 2(a)
1978-1979	Form 1041, line 58(a)
1980	Form 1041, line 57(a)
1981-1982	Form 1041, line 55(a)
1983-2001	Schedule B, Form 1041, line 2

Part III - Taxes Imposed on Undistributed Net Income

For the regular tax computation, if there is a capital gain, complete lines 18 through 25 for each throwback year. If the trustee elected the alternative tax on capital gains, complete lines 26 through 31 instead of lines 18 through 25 for each applicable year. If there is no capital gain for any year, or there is a capital loss for every year, enter on line 9 the amount of the tax for each year identified in the instruction for line 18 and do not complete Part III. If the trust received an accumulation distribution from another trust, see Regulations section 1.665(b)-1A.

Note:   The alternative tax on capital gains was repealed for tax years beginning after December 31, 1978. The maximum rate on net capital gain for 1981, 1987, and 1991 through 2001 is not an alternative tax for this purpose.

Line 18 - Regular Tax

Enter the applicable amounts as follows:

Throwback year(s)	Amount from line
1969-1976	Form 1041, page 1, line 24
1977	Form 1041, page 1, line 26
1978-1979	Form 1041, line 27
1980-1984	Form 1041, line 26c
1985-1986	Form 1041, line 25c
1987	Form 1041, line 22c
1988-2001	Schedule G, Form 1041, line 1a

Line 19 - Trust's Share of Net Short-Term Gain

For each throwback year, enter the smaller of the capital gain from the two lines indicated. If there is a capital loss or a zero on either or both of the two lines indicated, enter zero on line 19.

Throwback year(s)	Amount from line
1969-1970	Schedule D, line 10, column 2, or Schedule D, line 12, column 2
1971-1978	Schedule D, line 14, column 2, or Schedule D, line 16, column 2
1979	Schedule D, line 18, column (b), or Schedule D, line 20, column (b)
1980-1981	Schedule D, line 14, column (b), or Schedule D, line 16, column (b)
1982	Schedule D, line 16, column (b), or Schedule D, line 18, column (b)
1983-1996	Schedule D, line 15, column (b), or Schedule D, line 17, column (b)
1997-2001	Schedule D, line 14, column (2), or Schedule D, line 16, column (2)

Line 20 - Trust's Share of Net Long-Term Gain

Enter the applicable amounts as follows:

Throwback year(s)	Amount from line
1969-1970	50% of Schedule D, line 13(e)
1971-1977	50% of Schedule D, line 17(e)
1978	Schedule D, line 17(e), or line 31, whichever is applicable, less Form 1041, line 23
1979	Schedule D, line 25 or line 27, whichever is applicable, less Form 1041, line 23
1980-1981	Schedule D, line 21, less Schedule D, line 22
1982	Schedule D, line 23, less Schedule D, line 24
1983-1986	Schedule D, line 22, less Schedule D, line 23
1987-1996	Schedule D, the smaller of any gain on line 16 or line 17, column (b)
1997-2001	Schedule D, the smaller of any gain on line 15c or line 16, column (2)

Line 22 - Taxable Income

Enter the applicable amounts as follows:

Throwback year(s)	Amount from line
1969-1976	Form 1041, page 1, line 23
1977	Form 1041, page 1, line 25
1978-1979	Form 1041, line 26
1980-1984	Form 1041, line 25
1985-1986	Form 1041, line 24
1987	Form 1041, line 21
1988-1996	Form 1041, line 22
1997	Form 1041, line 23
1998-2001	Form 1041, line 22

Line 26 - Tax on Income Other Than Long-Term Capital Gain

Enter the applicable amounts as follows:

Throwback year(s)	Amount from line
1969	Schedule D, line 20
1970	Schedule D, line 19
1971	Schedule D, line 50
1972-1975	Schedule D, line 48
1976-1978	Schedule D, line 27

Line 27 - Trust's Share of Net Short-Term Gain

If there is a loss on any of the following lines, enter zero on line 27 for the applicable throwback year. Otherwise, enter the applicable amounts as follows:

Throwback year(s)	Amount from line
1969-1970	Schedule D, line 10, column 2
1971-1978	Schedule D, line 14, column 2

Line 28 - Trust's Share of Taxable Income Less Section 1202 Deduction

Enter the applicable amounts as follows:

Throwback year(s)	Amount from line
1969	Schedule D, line 19
1970	Schedule D, line 18
1971	Schedule D, line 38
1972-1975	Schedule D, line 39
1976-1978	Schedule D, line 21

Part IV - Allocation to Beneficiary

Complete Part IV for each beneficiary. If the accumulation distribution is allocated to more than one beneficiary, attach an additional copy of Schedule J with Part IV completed for each additional beneficiary. Give each beneficiary a copy of his or her respective Part IV information. If more than 5 throwback years are involved, use another Schedule J, completing Parts II and III for each additional throwback year.

If the beneficiary is a nonresident alien individual or a foreign corporation, see section 667(e) about retaining the character of the amounts distributed to determine the amount of the U.S. withholding tax.

The beneficiary uses Form 4970 to figure the tax on the distribution. The beneficiary also uses Form 4970 for the section 667(b)(6) tax adjustment if an accumulation distribution is subject to estate or generation-skipping transfer tax. This is because the trustee may not be the estate or generation-skipping transfer tax return filer.

Schedule K-1 (Form 1041) - Beneficiary's Share of Income, Deductions, Credits, etc.

General Instructions

Use Schedule K-1 (Form 1041) to report the beneficiary's share of income, deductions, and credits from a trust or a decedent's estate.

Grantor type trusts do not use Schedule K-1 (Form 1041) to report the income, deductions, or credits of the grantor (or other person treated as owner). See Special Filing Instructions for Grantor Type Trusts, Pooled Income Funds, and Electing Small Business Trusts on page 4.

Who Must File

The fiduciary (or one of the joint fiduciaries) must file Schedule K-1. A copy of each beneficiary's Schedule K-1 is attached to the Form 1041 filed with the IRS and each beneficiary is given a copy of his or her respective Schedule K-1. One copy of each Schedule K-1 must be retained for the fiduciary's records.

Beneficiary's Identifying Number

As a payer of income, you are required under section 6109 to request and provide a proper identifying number for each recipient of income. Enter the beneficiary's number on the respective Schedule K-1 when you file Form 1041. Individuals and business recipients are responsible for giving you their TIN upon request. You may use Form W-9, Request for Taxpayer Identification Number and Certification, to request the beneficiary's identifying number.

Penalty.   Under section 6723, the payer is charged a $50 penalty for each failure to provide a required TIN, unless reasonable cause is established for not providing it. Explain any reasonable cause in a signed affidavit and attach it to this return.

Tax Shelter's Identification Number

If the estate or trust is a tax shelter, is involved in a tax shelter, or is considered to be the organizer of a tax shelter, there are reporting requirements under section 6111 for both the fiduciaries and the beneficiaries.

See Form 8264, Application for Registration of a Tax Shelter, and Form 8271, Investor Reporting of Tax Shelter Registration Number, and their related instructions for information regarding the fiduciary's reporting requirements.

Substitute Forms

You do not need prior IRS approval for a substitute Schedule K-1 (Form 1041) that follows the specifications for filing substitute Schedules K-1 in Pub. 1167, General Rules and Specifications for Substitute Tax Forms and Schedules, or is an exact copy of an IRS Schedule K-1. You must request IRS approval to use other substitute Schedules K-1. To request approval, write to:

Internal Revenue Service
Attention: Substitute Forms Unit
W:CAR:MP:FP:S:SP
Rm. 6411
1111 Constitution Avenue, NW
Washington, DC 20224

Inclusion of Amounts in Beneficiaries' Income

Simple trust.   The beneficiary of a simple trust must include in his or her gross income the amount of the income required to be distributed currently, whether or not distributed, or if the income required to be distributed currently to all beneficiaries exceeds the distributable net income (DNI), his or her proportionate share of the DNI. The determination of whether trust income is required to be distributed currently depends on the terms of the trust instrument and applicable local law. See Regulations section 1.652(c)-4 for a comprehensive example.

Estates and complex trusts.   The beneficiary of a decedent's estate or complex trust must include in his or her gross income the sum of:

1. The amount of the income required to be distributed currently, or if the income required to be distributed currently to all beneficiaries exceeds the DNI (figured without taking into account the charitable deduction), his or her proportionate share of the DNI (as so figured) and
2. All other amounts properly paid, credited, or required to be distributed, or if the sum of the income required to be distributed currently and other amounts properly paid, credited, or required to be distributed to all beneficiaries exceeds the DNI, his or her proportionate share of the excess of DNI over the income required to be distributed currently.

See Regulations section 1.662(c)-4 for a comprehensive example.

For complex trusts that have more than one beneficiary, and if different beneficiaries have substantially separate and independent shares, their shares are treated as separate trusts for the sole purpose of determining the amount of DNI allocable to the respective beneficiaries. For the estates of decedents dying after August 5, 1997, a similar rule applies to treat substantially separate and independent shares of different beneficiaries of an estate as separate estates. For examples of the application of the separate share rule, see the regulations under section 663(c).

Character of income.   The beneficiary's income is considered to have the same proportion of each class of items entering into the computation of DNI that the total of each class has to the DNI (e.g., half dividends and half interest if the income of the estate or trust is half dividends and half interest).

Allocation of deductions.   Generally, items of deduction that enter into the computation of DNI are allocated among the items of income to the extent such allocation is not inconsistent with the rules set out in section 469 and its regulations, relating to passive activity loss limitations, in the following order.

First, all deductions directly attributable to a specific class of income are deducted from that income. For example, rental expenses, to the extent allowable, are deducted from rental income.

Second, deductions that are not directly attributable to a specific class of income generally may be allocated to any class of income, as long as a reasonable portion is allocated to any tax-exempt income. Deductions considered not directly attributable to a specific class of income under this rule include fiduciary fees, safe deposit box rental charges, and state income and personal property taxes. The charitable deduction, however, must be ratably apportioned among each class of income included in DNI.

Finally, any excess deductions that are directly attributable to a class of income may be allocated to another class of income. However, in no case can excess deductions from a passive activity be allocated to income from a nonpassive activity, or to portfolio income earned by the estate or trust. Excess deductions attributable to tax-exempt income cannot offset any other class of income.

In no case can deductions be allocated to an item of income that is not included in the computation of DNI, or attributable to corpus.

Except for the final year, and for depreciation or depletion allocations in excess of income (see Rev. Rul. 74-530, 1974-2 C.B. 188), you may not show any negative amounts for any class of income, because the beneficiary generally may not claim losses or deductions from the estate or trust.

Gifts and bequests.   Do not include in the beneficiary's income any gifts or bequests of a specific sum of money or of specific property under the terms of the governing instrument that are paid or credited in three installments or less.

Amounts that can be paid or credited only from income of the estate or trust do not qualify as a gift or bequest of a specific sum of money.

Past years.   Do not include in the beneficiary's income any amounts deducted on Form 1041 for an earlier year that were credited or required to be distributed in that earlier year.

Beneficiary's Tax Year

The beneficiary's income from the estate or trust must be included in the beneficiary's tax year during which the tax year of the estate or trust ends. See Pub. 559 for more information, including the effect of the death of a beneficiary during the tax year of the estate or trust.

Specific Instructions

Line 1 - Interest

Enter the beneficiary's share of the taxable interest income minus allocable deductions.

Line 2 - Ordinary Dividends

Enter the beneficiary's share of ordinary dividends minus allocable deductions.

Line 3 - Net Short-Term Capital Gain

Enter the beneficiary's share of the net short-term capital gain from line 14, column (1), Schedule D (Form 1041), minus allocable deductions. Do not enter a loss on line 3. If, for the final year of the estate or trust, there is a capital loss carryover, enter on line 13b the beneficiary's share of short-term capital loss carryover. However, if the beneficiary is a corporation, enter on line 13b the beneficiary's share of all short- and long-term capital loss carryovers as a single item. See section 642(h) and related regulations for more information.

Lines 4a through 4d - Net Long-Term Capital Gain

Enter the beneficiary's share of the net long-term capital gain from lines 15a through 15d, column (1), Schedule D (Form 1041) minus allocable deductions.

Do not enter a loss on lines 4a through 4d. If, for the final year of the estate or trust, there is a capital loss carryover, enter on line 13c the beneficiary's share of the long-term capital loss carryover. (If the beneficiary is a corporation, see the instructions for line 3.) See section 642(h) and related regulations for more information.

Gains or losses from the complete or partial disposition of a rental, rental real estate, or trade or business activity that is a passive activity, must be shown on an attachment to Schedule K-1.

Line 5a - Annuities, Royalties, and Other Nonpassive Income

Enter the beneficiary's share of annuities, royalties, or any other income, minus allocable deductions (other than directly apportionable deductions), that is not subject to any passive activity loss limitation rules at the beneficiary level. Use line 6a to report income items subject to the passive activity rules at the beneficiary's level.

Lines 5b and 6b - Depreciation

Enter the beneficiary's share of the depreciation deductions attributable to each activity reported on lines 5a and 6a. See the instructions on page 14 for a discussion of how the depreciation deduction is apportioned between the beneficiaries and the estate or trust. Report any AMT adjustment or tax preference item attributable to depreciation separately on line 12a.

Note:   An estate or trust cannot make an election under section 179 to expense certain tangible property.

Lines 5c and 6c - Depletion

Enter the beneficiary's share of the depletion deduction under section 611 attributable to each activity reported on lines 5a and 6a. See the instructions on page 14 for a discussion of how the depletion deduction is apportioned between the beneficiaries and the estate or trust. Report any tax preference item attributable to depletion separately on line 12b.

Lines 5d and 6d - Amortization

Itemize the beneficiary's share of the amortization deductions attributable to each activity reported on lines 5a and 6a. Apportion the amortization deductions between the estate or trust and the beneficiaries in the same way that the depreciation and depletion deductions are divided. Report any AMT adjustment attributable to amortization separately on line 12c.

Line 6a - Trade or Business, Rental Real Estate, and Other Rental Income

Enter the beneficiary's share of trade or business, rental real estate, and other rental income, minus allocable deductions (other than directly apportionable deductions). To assist the beneficiary in figuring any applicable passive activity loss limitations, also attach a separate schedule showing the beneficiary's share of income derived from each trade or business, rental real estate, and other rental activity.

Lines 6b Through 6d

The limitations on passive activity losses and credits under section 469 apply to estates and trusts. Estates and trusts that distribute income to beneficiaries are allowed to apportion depreciation, depletion, and amortization deductions to the beneficiaries. These deductions are referred to as directly apportionable deductions.

Rules for treating a beneficiary's income and directly apportionable deductions from an estate or trust and other rules for applying the passive loss and credit limitations to beneficiaries of estates and trusts have not yet been issued.

Any directly apportionable deduction, such as depreciation, is treated by the beneficiary as having been incurred in the same activity as incurred by the estate or trust. However, the character of such deduction may be determined as if the beneficiary incurred the deduction directly.

To assist the beneficiary in figuring any applicable passive activity loss limitations, also attach a separate schedule showing the beneficiary's share of directly apportionable deductions derived from each trade or business, rental real estate, and other rental activity.

Line 7 - Income for Minimum Tax Purposes

Enter the beneficiary's share of the income distribution deduction figured on a minimum tax basis from line 44 of Schedule I.

Line 8 - Income for Regular Tax Purposes

Enter the beneficiary's share of the income distribution deduction figured on line 15 of Schedule B. This amount should equal the sum of lines 1 through 3, 4c, 5a, and 6a.

Line 10 - Estate Tax Deduction (Including Certain Generation-Skipping Transfer Taxes)

If the distribution deduction consists of any income in respect of a decedent, and the estate or trust was allowed a deduction under section 691(c) for the estate tax paid attributable to such income (see the line 19 instructions on page 17), then the beneficiary is allowed an estate tax deduction in proportion to his or her share of the distribution that consists of such income. For an example of the computation, see Regulations section 1.691(c)-2. Figure the computation on a separate sheet and attach it to the return.

Line 11 - Foreign Taxes

List on a separate sheet the beneficiary's share of the applicable foreign taxes paid or accrued and the various foreign source figures needed to figure the beneficiary's foreign tax credit. See Pub. 514 and section 901(b)(5) for special rules about foreign taxes.

Lines 12a through 12c

Enter any adjustments or tax preference items attributable to depreciation, depletion, or amortization that were allocated to the beneficiary. For property placed in service before 1987, report separately the accelerated depreciation of real and leased personal property.

Line 12d - Exclusion Items

Enter the beneficiary's share of the adjustment for minimum tax purposes from Schedule K-1, line 9, that is attributable to exclusion items (Schedule I, lines 2 through 6 and 8).

Line 13a - Excess Deductions on Termination

If this is the final return of the estate or trust, and there are excess deductions on termination (see the instructions for line 22 on page 17), enter the beneficiary's share of the excess deductions on line 13a. Figure the deductions on a separate sheet and attach it to the return.

Excess deductions on termination occur only during the last tax year of the trust or decedent's estate when the total deductions (excluding the charitable deduction and exemption) are greater than the gross income during that tax year.

Generally, a deduction based on an NOL carryover is not available to a beneficiary as an excess deduction. However, if the last tax year of the estate or trust is also the last year in which an NOL carryover may be taken (see section 172(b)), the NOL carryover is considered an excess deduction on the termination of the estate or trust to the extent it is not absorbed by the estate or trust during its final tax year. For more information, see Regulations section 1.642(h)-4 for a discussion of the allocation of the carryover among the beneficiaries.

Only the beneficiary of an estate or trust that succeeds to its property is allowed to deduct that entity's excess deductions on termination. A beneficiary who does not have enough income in that year to absorb the entire deduction may not carry the balance over to any succeeding year. An individual beneficiary must be able to itemize deductions in order to claim the excess deductions in determining taxable income.

Lines 13b and 13c - Unused Capital Loss Carryover

Upon termination of the trust or decedent's estate, the beneficiary succeeding to the property is allowed as a deduction any unused capital loss carryover under section 1212. If the estate or trust incurs capital losses in the final year, use the Capital Loss Carryover Worksheet on page 34 to figure the amount of capital loss carryover to be allocated to the beneficiary.

Lines 13d and 13e - Net Operating Loss (NOL) Carryover

Upon termination of a trust or decedent's estate, a beneficiary succeeding to its property is allowed to deduct any unused NOL (and any ATNOL) carryover for regular and AMT purposes if the carryover would be allowable to the estate or trust in a later tax year but for the termination. Enter on lines 13d and 13e the unused carryover amounts.

Line 14 - Other

Itemize on line 14, or on a separate sheet if more space is needed, the beneficiary's tax information not entered elsewhere on Schedule K-1. This includes the allocable share, if any, of:

• Payment of estimated tax to be credited to the beneficiary (section 643(g));
• Tax-exempt interest income received or accrued by the trust (including exempt-interest dividends from a mutual fund or other regulated investment company);
• Investment income (section 163(d));
• Gross farming and fishing income;
• Credit for backup withholding (section 3406);
• The information a beneficiary will need to figure any investment credit;
• The work opportunity credit;
• The welfare-to-work credit;
• The alcohol fuel credit;
• The credit for increasing research activities;
• The low-income housing credit;
• The renewable electricity production credit;
• The empowerment zone and renewal community employment credit;
• The Indian employment credit;
• The orphan drug credit;
• Credit for employer-provided child care facilities and services;
• New York Liberty Zone business employee credit;
• The information a beneficiary will need to figure any recapture taxes; and
• Foreign trading gross receipts as defined in section 942(a).

Note:   Upon termination of an estate or trust, any suspended passive activity losses (PALs) relating to an interest in a passive activity cannot be allocated to the beneficiary. Instead, the basis in such activity is increased by the amount of any PALs allocable to the interest, and no losses are allowed as a deduction on the estate's or trust's final Form 1041.

Paperwork Reduction Act Notice.

We ask for the information on this form to carry out the Internal Revenue laws of the United States. You are required to give us the information. We need it to ensure that you are complying with these laws and to allow us to figure and collect the right amount of tax.

You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, as required by Code section 6103.

The time needed to complete and file this form and related schedules will vary depending on individual circumstances. The estimated average times are:

	Form 1041	Schedule D	Schedule D Tax Worksheet	Schedule J	Schedule K-1
Recordkeeping	48 hr., 17 min.	27 hr., 0 min.	8 hr., 51 min.	39 hr., 27 min.	9 hr., 5 min.
Learning about the law or the form	19 hr., 57 min.	2 hr., 28 min.	- - - -	1 hr., 17 min.	1 hr., 23 min.
Preparing the form	37 hr., 25 min.	3 hr., 1 min.	8 min.	1 hr., 59 min.	1 hr., 36 min.
Copying, assembling, and sending the form to the IRS	4 hr., 33 min.	- - - -	- - - -	- - - -	- - - -

If you have comments concerning the accuracy of these time estimates or suggestions for making this form and related schedules simpler, we would be happy to hear from you. You can write to the Tax Forms Committee, Western Area Distribution Center, Rancho Cordova, CA 95743-0001. Do not send the tax form to this address. Instead, see Where To File on page 42.

Where To File

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