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Q: Do trusts have a requirement to file federal income tax returns? A: Trusts must file a Form 1041, U.S. Income Tax Return for Estates and Trusts, for each taxable year where the trust has $600 in income or the trust has a non-resident alien as a beneficiary.

To enter a Cancellation of Debt for an Estate or Trust return, enter it as other income on Form 1041 U.S. Income Tax Return for Estates and Trusts, Line 8. To enter this in TaxAct Form 1041: From within your TaxAct return (Online or Desktop), click Federal.

Are investment management fees deductible on form 1041, like on line 15a Other Deductions? No. The TCJA suspended the deduction for miscellaneous itemized deductions for individuals until 2025.

Trust beneficiaries must pay taxes on income and other distributions from a trust. Trust beneficiaries don't have to pay taxes on returned principal from the trust's assets. IRS forms K-1 and 1041 are required for filing tax returns that receive trust disbursements.

Form 1041: Estates or trusts must file Form 1041 by the fifteenth day of the fourth month after the close of the trust's or estate's tax year. For example, for a trust or estate with a tax year ending December 31, the due date is April 15 of the following year.

The income shown on the T3 slip could be in the form of interest, dividends, and capital gains, and is taxable.