Foreign estates and foreign trusts with income effectively connected to the United States file Form 1040-NR, rather than Form 1041. (Form 1041 is only used by domestic estates and trusts.)
In the nonresident income tax return in TaxSlayer Pro, to indicate a foreign trust or estate is filing Form 1040-NR select:
- Personal Information
- Other Categories
- 1040NR Other Information
- Type of 1040NR Entity - Select Estate or Trust as appropriate.
If the return is being filed for a trust, in the same Schedule OI Other Information menu select:
- Filing a Return for a Trust - Select YES, then select Yes or No to the follow up question: "Did the trust have a U.S. or foreign owner under the grantor trust rules, make a distribution or loan to a U.S. person, or receive a contribution from a U.S. person?"
Important points about Form 1040-NR being filed for a foreign estate or trust
The IRS notes several important things to bear in mind regarding Form 1040-NR being prepared for a foreign estate or trust.
- If you’re filing Form 1040-NR for an estate or trust, enter the EIN of the estate or trust. If the estate or trust doesn’t have an EIN, [it] must apply for one.
- Change the form to reflect the provisions of subchapter J, chapter 1, of the Internal Revenue Code. You may find it helpful to refer to Form 1041 and its instructions when completing the Form 1040-NR. Refer to the Instructions for Form 1040 only as necessary.
- The instructions for estates and trusts on the main form may, in certain instances, align more with the Instructions for Form 1041 ... than with the Instructions for Form 1040, which are for individuals.
- You will still need to follow the Instructions for Schedule NEC ... if the estate or trust has U.S. source income that is not effectively connected with a U.S. trade or business.
- If you’re filing Form 1040-NR for a foreign trust, you may have to file Form 3520-A, Annual Information Return of Foreign Trust With a U.S. Owner, on or before the 15th day of the 3rd month after the end of the trust’s tax year.
- If you file for a nonresident alien estate or trust that has an office in the United States, file the return by the 15th day of the 4th month after the tax year ends. If you file for a nonresident alien estate or trust that does not have an office in the United States, file the return by the 15th day of the 6th month after the tax year ends.
Additional Information:
IRS: Publication 519: U.S. Tax Guide for Aliens
IRS: Instructions for Form 1040-NR, U.S. Nonresident Alien Income Tax Return
IRS: Foreign trust reporting requirements and tax consequences