Knowledge Base

11181: 1041 - Distribution Exemption Amount

1041 Fiduciary

On a 1041 return for a simple trust, I am getting $100 on line 21 as distribution exemption. On other returns I am getting a $300 exemption. Why the difference?

The exemption is $100 unless the return is one of the following: 

  • A simple trust and 1041 screen 1 has the Distribute all income box checked. In this case, the exemption is $300 because a trust whose governing instrument requires that all income be distributed currently is allowed a $300 exemption, even if it distributed amounts other than income during the tax year.
  • A decedent's estate, in which case a $600 exemption is allowed.
  • A qualified disability trust, in which case a $4,700 exemption is allowed.
  • A final year estate or trust return, in which case no exemption amount is allowed.
    • An exemption amount is not figured or passed through to the beneficiaries in the final year. Per the 1041 instructions, page 28, "If the estate or trust has for its final year deductions (excluding the charitable deduction and exemption) in excess of its gross income, the excess is allowed as an itemized deduction to the beneficiaries succeeding to the property of the estate or trust." 
    • See the screen MISC in data entry for more information. 

See the 1041 Instructions for line 21.

Also In This Category

On a scale of 1-5, please rate the helpfulness of this article

Not Helpful
Very Helpful
Optionally provide private feedback to help us improve this article...

Thank you for your feedback!

Article has been viewed 8.2K times.
Last Modified: 3 Weeks Ago
Article not rated yet.