The IRS has proposed regulations that may simplify reporting for certain trusts claiming charitable deductions. Under the proposed regs, a trust wouldn’t need to file Form 1041-A, “U.S. Information Return Trust Accumulation of Charitable Amounts,” for a tax year if its only charitable deduction comes from contributions made by a passthrough entity in which the trust owns an interest. The proposed regs also clarify that split-interest trusts meet their reporting obligations by filing Form 5227, “Split-Interest Trust Information Return.” The new rules would generally apply to tax years ending after the regs are finalized, but qualifying trusts may rely on them now. Contact us with questions.
