When a person who is neither a U.S. citizen nor a U.S. resident passes away owning U.S.-based property, their estate may need to file Form 706-NA (United States Estate and Generation-Skipping Transfer Tax Return). This specialized tax form calculates federal estate taxes owed on U.S. assets, a process that can seem daunting for foreign executors and families. Here's what you need to know about Form 706-NA in plain English.

What Form 1041-A Is For

Form 1041-A is an information return that trustees must file to report charitable deductions claimed by certain trusts. Unlike Form 1041 (which reports the trust's income and calculates taxes), Form 1041-A is specifically designed to provide the IRS with detailed information about how trusts accumulate and distribute charitable amounts.

The form serves as a transparency tool, requiring trustees to disclose:

• Income set aside for charitable purposes under section 642(c) of the Internal Revenue Code
• Actual distributions made to charitable organizations
• The trust's balance sheet showing assets and liabilities
• Details about which charities received funds and for what purposes

This reporting requirement stems from section 6034 and related regulations, which aim to prevent abuse of charitable deductions by ensuring that money claimed as charitable expenses actually goes to legitimate charitable purposes. IRS.gov

When You’d Use Form 1041-A

Who Must File

For tax year 2013, you must file Form 1041-A if your trust claimed a charitable deduction under section 642(c) on Form 1041, with specific exceptions. You do NOT need to file if your trust falls into one of these categories:

• Simple trusts that must distribute all income currently to beneficiaries
• Charitable trusts described in section 4947(a)(1)
• Split-interest trusts described in section 4947(a)(2) (these file Form 5227 instead)
• Electing small business trusts (ESBTs) described in section 641(c)

Filing Deadline

Form 1041-A for the 2013 tax year was due by April 15, 2014. Since this was a calendar-year return, the deadline fell on the next business day if April 15 was a weekend or legal holiday. IRS.gov

Extensions

If you needed more time, you could file Form 8868 (Application for Automatic Extension of Time to File an Exempt Organization Return) on or before the original due date. This provided an automatic extension for filing Form 1041-A.

Amended Returns

If you discover errors or need to add information to an already-filed Form 1041-A, you can file an amended return at any time. Complete the entire form again (not just the corrections), and write "Amended Return" across the top. The IRS accepts amended returns to change or supplement information from the original filing for the same tax period.

Key Rules or Details for 2013

Simplified Reporting for Smaller Trusts

If your trust's total income was $25,000 or less, you could skip the detailed income and deduction lines (lines 1-8 of Part I) and just enter the total income on line 9. However, you still needed to complete the charitable distribution sections. IRS.gov

Balance Sheet Requirements

All filers must complete columns (a) and (b) of Part IV (beginning and end-of-year values). For trusts with income of $25,000 or less, you only needed to complete lines 38, 42, and 45—showing total assets, total liabilities, and total net assets.

Section 642(c) Charitable Deduction Rules

The charitable deduction reported on Form 1041-A must meet specific requirements. Generally, amounts must be paid or permanently set aside for charitable purposes from gross income. For amounts "permanently set aside," special rules applied—primarily for trusts created before October 9, 1969. IRS.gov

Filing Location

For 2013, all Form 1041-A returns were sent to:
Department of the Treasury
Internal Revenue Service Center
Ogden, UT 84201-0027

Multiple Trust Aggregation

An important anti-avoidance rule states that two or more trusts with substantially the same grantors and primary beneficiaries will be treated as one trust if a principal purpose is tax avoidance.

Step-by-Step (High Level)

Step 1: Gather Documentation

Collect your trust instrument, the 2013 Form 1041 (where you claimed the charitable deduction), records of all charitable distributions, and year-end financial statements showing the trust's assets and liabilities.

Step 2: Complete the Header

Enter the trust's name, employer identification number (EIN), trustee's name, and mailing address. Also fill in the tax year (2013 for calendar-year trusts).

Step 3: Complete Part I (Income and Deductions)

Report the trust's income from all sources—interest, dividends, business income, capital gains, rents, etc. Then list deductions including interest, taxes, trustee fees, attorney fees, and the charitable deduction itemized by purpose. If total income is $25,000 or less, you can skip to line 9.

Step 4: Complete Part II (Distributions of Income Set Aside)

This section tracks income that was set aside in prior years and distributed during 2013, as well as income set aside during 2013 for future charitable purposes. You must itemize each distribution, including the charity's name, address, and the specific charitable purpose (not just "charitable").

Step 5: Complete Part III (Distributions of Principal)

Similar to Part II, but for distributions made from the trust's principal (corpus) rather than income. List prior distributions and current-year distributions with full details.

Step 6: Complete Part IV (Balance Sheets)

Report the trust's assets (cash, investments, property, etc.) and liabilities at both the beginning and end of 2013. This provides the IRS with a complete financial picture of the trust.

Step 7: Review and Sign

The trustee (or authorized representative) must sign and date the form under penalty of perjury. If you used a paid preparer, they must also sign and provide their information.

Step 8: Mail and Keep Records

Send the completed form to Ogden, UT by April 15, 2014 (or the extended due date). Keep copies of the return and all supporting documentation.

Common Mistakes and How to Avoid Them

Mistake #1: Vague Charitable Purpose Descriptions

Many filers simply write "charitable" or "religious" when describing distributions. The IRS requires specific details. Instead of "charitable donation," write "payment of $4,000 to indigent persons for medical purposes" or "grant of $25,000 to equip the chemistry lab at State University." Include the charity's name and address. IRS.gov

Mistake #2: Not Filing When Required

Some trustees mistakenly think they don't need Form 1041-A because their trust also files Form 5227 or because it's a "simple" trust. Review the exceptions carefully—if your trust claimed a section 642(c) deduction and doesn't fall under a specific exception, you must file.

Mistake #3: Missing the Deadline Without Extension

Form 1041-A has a penalty of $10 per day (up to $5,000) for late filing without reasonable cause, assessed against both the trust AND the trustee personally. Always file Form 8868 before the original due date if you need more time.

Mistake #4: Incomplete Balance Sheets

Leaving Part IV blank or partially completed is a common error. Even if your trust's income was under $25,000 (allowing you to skip some income details), you still must complete lines 38, 42, and 45 of the balance sheet.

Mistake #5: Using Wrong Accounting Method

The balance sheet should use the same accounting method your trust uses in its books and records. Switching methods between the trust's books and Form 1041-A creates inconsistencies that trigger IRS questions.

Mistake #6: Forgetting to Report Prior-Year Set-Asides

Part II requires reporting income that was set aside in previous years (with a deduction claimed then) but distributed during 2013. Many trustees forget to track these multi-year transactions.

What Happens After You File

Processing Time

The IRS processes Form 1041-A as an information return. Unlike Form 1041, there's no refund to receive or additional tax calculation. The IRS uses Form 1041-A primarily to verify that charitable deductions claimed on Form 1041 are legitimate and properly substantiated.

No Immediate Response

In most cases, if your Form 1041-A is complete and accurate, you won't hear anything from the IRS. The form goes into their records and may be reviewed if the related Form 1041 is audited.

Potential Inquiries

If the IRS identifies inconsistencies between Form 1041 and Form 1041-A, or if charitable distributions appear unusual, you may receive a letter requesting additional documentation. For example, if Form 1041 claimed a $50,000 charitable deduction but Form 1041-A shows only $30,000 distributed, expect questions.

Public Inspection

Form 1041-A is subject to public inspection rules under Regulations section 301.6104(b)-1(d). Interested parties can request to view your filed Form 1041-A through specific IRS procedures, similar to how Form 990 (for charities) is publicly available.

Record Retention

Keep copies of Form 1041-A and all supporting documentation for at least three years from the filing date, or longer if the related Form 1041 is under audit. Since charitable deductions can be scrutinized years later, many tax professionals recommend keeping these records for seven years.

Penalties After Filing

If the IRS later determines your Form 1041-A was fraudulent or substantially incomplete, penalties beyond the late-filing penalty can apply. Section 6652(c)(2) provides the statutory framework for these penalties.

FAQs

Q1: What's the difference between Form 1041 and Form 1041-A?

Form 1041 is the income tax return that reports the trust's income, deductions, and calculates tax liability. Form 1041-A is purely an information return that provides detailed charitable information to the IRS. Think of Form 1041 as your "main" tax return and Form 1041-A as a specialized supplement that digs deeper into charitable activities.

Q2: Our trust distributed $10,000 to charity in 2013 but only claimed a $7,000 deduction on Form 1041 due to income limitations. What amount do we report on Form 1041-A?

Report the actual $10,000 distribution on Form 1041-A in Part II or Part III (depending on whether it came from income or principal). Form 1041-A tracks actual charitable activity, not just the amount deducted for tax purposes. The IRS uses this to understand the full picture of the trust's charitable operations.

Q3: Can we file Form 1041-A electronically for 2013?

The 2013 version of Form 1041-A was primarily filed by paper. While electronic filing options for Form 1041 were expanding in 2013, Form 1041-A electronic filing was not universally available through most tax software. Check with your tax professional or software provider for specific capabilities.

Q4: What happens if we discover an error on our 2013 Form 1041-A in 2025?

You can file an amended Form 1041-A at any time. Complete the entire form with corrected information, write "Amended Return" at the top, and mail it to the same address. Include an explanation of what changed and why. While the statute of limitations for tax adjustments may have expired, correcting the information record is still appropriate.

Q5: Our split-interest charitable remainder trust has charitable deductions. Do we file Form 1041-A?

No. Split-interest trusts described in section 4947(a)(2) are specifically exempted from Form 1041-A requirements. These trusts file Form 5227 (Split-Interest Trust Information Return) instead, which satisfies the section 6034 charitable reporting requirements. IRS.gov

Q6: We missed the 2014 filing deadline for our 2013 return. What should we do now?

File the return as soon as possible, even though it's late. Include a detailed written explanation of why you missed the deadline (reasonable cause). The penalty is $10 per day up to $5,000, but it can be abated if you show reasonable cause for the delay. The longer you wait, the harder it becomes to demonstrate reasonable cause.

Q7: How detailed must our charitable purpose descriptions be?

Very detailed. The instructions explicitly state: "Do not merely enter the category (that is, religious, charitable, scientific, literary, or educational), but also enter the purpose of the deduction." Include the charity's name, address, amount paid, and specific purpose such as "funding medical research on diabetes" or "providing scholarships to underprivileged students." Generic descriptions like "charitable purposes" will likely trigger IRS inquiries. IRS.gov

Disclaimer

This guide provides general information about Form 1041-A for the 2013 tax year based on IRS publications and instructions. Tax situations vary greatly, and this should not be considered personalized tax advice. For specific questions about your trust's filing obligations, consult a qualified tax professional or attorney familiar with fiduciary taxation.