Understanding Your Annuity or Trust Tax Forms

By now everyone who has created a gift annuity or charitable trust through the Moravian Ministries Foundation has received their tax forms. We are pleased to share information from Kaspick and Company, our investment manager, on how to understand these forms.

Understanding Your Federal Schedule K-1 (Form 1041)
You and your tax advisor may find the following points helpful as you prepare your personal tax returns.

1. Save All Pages
Your Schedule K-1 consists of multiple pages. Most people will need information from all of the pages to complete their tax
returns.

  • Page 1 (printed on the back of the mailing sheet) displays general identification data about your trust and about you as a beneficiary. It also displays your share of the trust’s current year income.
  • Page 2 identifies where you should enter the various categories of income on your personal tax return.
  • Page 3 (printed on the back of Page 2) will contain a State Schedule K-1 or State Income Tax Information, if applicable.

2. Distributions from Mutual Funds
Distributions from mutual funds are reported as follows:

  • Line 2a includes your share of the total interest and dividend income received by the fund, as well as the short-term capital gain distributions you received.
  • Line 2b shows the portion of Line 2a that represents qualified dividends.
  • Line 4a includes your long-term capital gain distributions.

3. Interest on Bonds

  • The portion, if any, of the income reported on lines 1 and/or 2a attributable to U.S. government obligations is shown with the state information. This amount may be exempt from state income tax.
  • The dollar amount, if any, of your income that is attributable to federally tax-exempt bonds is shown in box 14 beside code A and with the state information.

4. Other Information

  • If you are required to use Federal Form 8960 to calculate the Net Investment Income tax (the 3.8% Medicare tax), the adjustment to net investment income, if any, is shown in box 14 beside code H.

Depending upon your residency and the location of the trustee, you may find enclosed a State Schedule K-1 or State Income Tax Information. If so, please refer to those documents to determine your state reportable amounts. Please consult your tax advisor if you have detailed questions about how your income should be reported on your personal tax returns.

To view a sample K-1, please click here: sample_schedule_k-1_2016.pdf

 

Form 1099-R

Form 1099-R is used to report the distribution of retirement benefits such as pensions, annuities or other retirement plans. To learn more about the form, please click here:

understanding_your_1099r_2016.pdf

 

understanding_your_1099r_2016.pdf

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