Level 3

Simple trust est. in Arizona with no specific accounting rules.

Forum|Forum|2 years ago
January 19, 2024
2 replies
9 views

AZ appears to follow UPIA (Unified Principle and Income Act although I'm not 100% sure. If yes how do I allocate 50% expenses to income and 50% to principle? And must I do that on the federal 1041 return as well?

This topic has been closed for replies.

sjrcpa

Level 15

@BobKamman ?

If it's an AZ Trust, the AZ rules apply to the federal return.

What software are you using?

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

Z

zeek349Author

Level 3

Proseries Basic.

BobKamman

Level 15

First, it's Uniform. Second, it's Principal. Third, this is a legal question. Federal computation of DNI doesn't rely on state law, except perhaps when assigning capital gains to income or principal. Each case is based on its own facts and circumstances. Allocations are the decision of the trustee, not the preparer.

Z

zeek349Author

Level 3

Bob Kamman:

I love your response! Sorry about the errors - I do my best to get things right but clearly got those two words wrong when referring to the UPIA.

I'm glad to learn that: "federal computation of DNI doesn't rely on state law except perhaps when assigning capital gains to income or principal. Each case is based on its own facts and circumstances. Allocations are the decision of the trustee, not the preparer. "

In this case I am both preparer and a co-trustee, and given what I know about the trust I'm confident the capital gains (losses) don't need to be allocated to principal.

Thank you 🙂

Sign up

Login with SSO

Let's get you signed in

Login with SSO

Scanning file for viruses.

This file cannot be downloaded