Form 8960 is calculating a NIIT tax on a final Form 1041 for an estate. Does this sound like a plausible scenario?

Forum|Forum|6 years ago
December 7, 2019
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Lacerte Tax

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Best answer by sjrcpa

No it does not sound correct. All income gets distributed on a final return, so there should be nothing upon which to calculate NIIT.

P.S. I could swear I answered this a couple of hours ago.

sjrcpaAnswer

Level 15

No it does not sound correct. All income gets distributed on a final return, so there should be nothing upon which to calculate NIIT.

P.S. I could swear I answered this a couple of hours ago.

The more I know the more I don’t know.

L

linda5Author

Level 2

I agree that DNI carries out all income on a final return. What is worrying me is that the calculations for portion of 8960 starting at Line 18 make some sense. The estate had interest, dividends, net rental income, a nonqualified annuity (large dollars), and IRA and a 403(b) (even larger dollars). All income except for the qualified plans factor into the 8960 calculations. They make up approximately 30% of all the assets, while the qualified plans are the other 70% of value. The deduction allocation on those workheets is reducing the charitable deduction (two charities totaling 40% of residue) by about 30% and other deductions by about 29%. That is what is leaving over $6,000 that is being determined as "undistributed income." The NIIT on $6,000 is $229.

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