Instructions for Form 1041-N

Instructions for Form 1041-N

(Rev. December 2025)

U.S. Income Tax Return for Electing Alaska Native Settlement Trusts

Section references are to the Internal Revenue Code unless

otherwise noted.

deductible to the extent they would not have been incurred if

the property were not held by the ANST.

Future Developments

Taxable Income

For the latest information about developments related to

Form 1041-N and its instructions, such as legislation enacted

after they were published, go to IRS.gov/Form1041N.

What’s New

Electronic payments. The U.S. Government is transitioning

from paper-based payments (including checks and money

orders) to and from the federal government to electronic

payments to improve efficiency and prevent delays, risks of

fraud, lost payments, and theft.

Making a payment. If there is a balance due on Part II,

line 20, go to IRS.gov/Payments for more information on how

to make a payment. See Line 20—Tax Due, later, for more

details.

Direct deposit. We have added direct deposit fields to lines

22c–22e. If there’s a refund on Part II, line 22b, enter your

direct deposit information on lines 22c, 22d, and 22e. See

Line 21—Overpayment, later, for more information.

General Instructions

Use this revision for tax years beginning after 2017.

Purpose of Form

Under section 646, an Alaska Native Settlement Trust

(ANST) may elect to apply special income tax treatment to

the trust and its beneficiaries. This one-time election is made

by filing Form 1041-N in the first tax year of the trust. Form

1041-N is used to report an ANST's income, deductions,

gains, losses, etc., and to figure and pay any income tax due.

Form 1041-N is also used to report special information

applicable to an ANST's filing requirements.

Definitions

An ANST is a settlement trust within the meaning of section

3(t) of the Alaska Native Claims Settlement Act (ANCSA).

An Alaska Native Corporation (ANC) has the same

meaning as the term “Native Corporation” has under section

3(m) of the ANCSA.

A “sponsoring AN” means the ANC that transfers assets to

an electing ANST.

A trustee is a fiduciary of the trust. Any reference in these

instructions to “you” means the trustee of the trust.

Tax Treatment of an Electing ANST

Adjusted Gross Income (AGI)

Figure the AGI of an electing ANST by subtracting from total

income (line 5) administrative costs (lines 7 through 9) and

the exemption amount (line 11). Administrative costs are

Dec 29, 2025

In general, an electing ANST's taxable income is figured in

the same manner as any other taxable trust (see Internal

Revenue Code subchapter J). However, the electing ANST

isn't allowed to take an income distribution deduction, though

it can claim an exemption deduction, the amount of which

depends on the terms of the trust.

See the Schedule K instructions for information on the

beneficiaries' tax treatment of distributions received from the

ANST.

Income Assignment From a Native Corporation

The ANST reports income assignments from an ANC on

the appropriate income line consistent with the type of

income assigned to the ANST. See Part III—Other

Information, Question 1, later, for the information required to

be attached to the form.

Tax

An electing ANST pays tax on its taxable income at the

lowest rate specified for single individuals (10%). If the ANST

has net capital gain or qualified dividends, use the tax

computation in Part IV of Schedule D, which applies a 0%

rate on its adjusted net capital gain.

Disqualifying Acts

If, at any time, a beneficial interest in an ANST may be

disposed of to a person in a manner that isn't permitted by

section 7(h) of the ANCSA (if the interest were settlement

common stock), then:

• If no election has previously been made, the ANST can't

elect special tax treatment under section 646 for the trust and

its beneficiaries; or

• If the election is in effect at that time:

1. The election won't apply as of the first day of the tax

year in which a prohibited disposition is first allowed;

2. The section 646 tax treatment won't apply to the trust

for that tax year or in any subsequent tax years; and

3. The distributable net income of the trust will be

increased by the current or accumulated earnings and profits

of the sponsoring ANC as of the close of the tax year, after

adjustment is made for all distributions made by the

sponsoring ANC during the tax year. However, this increase

is limited to the fair market value (FMV) of the trust's assets

as of the date the beneficial interest of the trust first becomes

disposable.

If stock in the sponsoring ANC may be disposed of to a

person in a manner that isn't allowed by section 7(h) of the

ANCSA (if the stock were settlement common stock) and at

any time after such disposition of stock is first allowed, the

corporation transfers assets to an ANST, then items 1, 2, and

3 above will apply to the ANST in the same manner as if the

Instructions for Form 1041-N (Rev. 12-2025) Catalog Number 38105U

Department of the Treasury Internal Revenue Service www.irs.gov

ANST allowed dispositions of beneficial interests in the ANST

in a manner not allowed by section 7(h) of the ANCSA.

The surrender of an interest in an ANC or an electing

ANST by the shareholder or beneficiary, for a whole or partial

redemption or for the whole or partial liquidation of the

corporation or trust, will be considered a transfer allowed by

section 7(h) of the ANCSA.

Information Reporting Requirements

Electing ANSTs must complete Schedule K and file it with

Form 1041-N. The ANST must also provide a copy of

Schedule K to the sponsoring ANC by the date Form 1041-N

is required to be filed with the IRS. The ANST isn't required to

provide information to the beneficiaries on distributions made

to them. The sponsoring ANC will provide the beneficiaries

with any required information.

Who Must File

The trustee of any electing ANST having any taxable income,

or having gross income of at least $600 for the tax year, must

file Form 1041-N for that year.

Making the Election

Caution: The trustee of an ANST must make this election by

the due date (including extensions) for filing the ANST's tax

return for its first tax year.

The trustee makes the election for the ANST by signing

Form 1041-N in the signature block on page 1. The return

must be filed by the due date (including extensions) for filing

the ANST's tax return for its first tax year. Once the election is

made, it applies to all subsequent years and can't be

revoked.

When To File

Who Must Sign

The trustee or an authorized representative must sign Form

1041-N.

Paid Preparer

Generally, anyone who is paid to prepare a tax return must

sign the return and provide the information requested in the

Paid Preparer Use Only section of the return. The person

required to sign the return must:

• Complete the required preparer information;

• Sign it in the space provided for the preparer's signature;

and

• Give you a copy of the return for your records, in addition

to the copy to be filed with the IRS.

Paid Preparer Authorization

If the trustee wants to allow the IRS to discuss the ANST's tax

return with the paid preparer who signed it, check the “Yes”

box in the signature area of the return. This authorization

applies only to the individual whose signature appears in the

Paid Preparer Use Only section of the ANST's return. It

doesn't apply to the firm, if any, shown in that section.

If the “Yes” box is checked, the trustee is authorizing the

IRS to call the paid preparer to answer any questions that

may arise during the processing of the ANST's return. The

trustee is also authorizing the paid preparer to:

• Give the IRS any information that is missing from the

ANST's return;

• Call the IRS for information about the processing of the

ANST's return or the status of its refund or payment(s); and

• Respond to certain IRS notices that the trustee has shared

with the preparer about math errors, offsets, and return

preparation. The notices won't be sent to the preparer.

Private Delivery Services (PDSs)

The trustee isn't authorizing the paid preparer to receive

any refund, enter into any agreement (including those

regarding additional tax liability), or otherwise represent the

ANST before the IRS. If the trustee wants to expand the paid

preparer's authorization, see Pub. 947, Practice Before the

IRS and Power of Attorney.

The PDS can tell you how to get written proof of the

mailing date.

Accounting Methods

ANSTs file Form 1041-N by the 15th day of the 4th month

following the close of the tax year. If the due date falls on a

Saturday, Sunday, or legal holiday, file on the next business

day.

You can use certain PDSs designated by the IRS to meet the

“timely mailing as timely filing”trule for tax returns. Go to

IRS.gov/PDS for the current list of designated services.

For the IRS mailing address to use if you’re using a PDS,

go to IRS.gov/PDSStreetAddresses.

Caution: PDSs can't deliver items to P.O. boxes. You must

use the U.S. Postal Service to mail any item to an IRS P.O.

box address.

Extension of Time To File

Use Form 7004, Application for Automatic Extension of Time

To File Certain Business Income Tax, Information, and Other

Returns, to request an automatic extension of time to file.

An extension of time to file doesn't extend the time to pay

the tax.

Where To File

File Form 1041-N at the following address.

Department of the Treasury

Internal Revenue Service

Ogden, UT 84201-0027

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The authorization can't be revoked. However, the

authorization will automatically end no later than the due date

(regardless of extensions) for filing the ANST's next tax

return.

Figure taxable income using the method of accounting

regularly used in keeping the ANST's books and records.

Generally, permissible methods include the cash method, the

accrual method, or any other method authorized by the

Internal Revenue Code. In all cases, the method used must

clearly reflect income.

Generally, the ANST may change its accounting method

(overall method or for any material item) only by getting

consent on Form 3115, Application for Change in Accounting

Method. For more information, see Pub. 538, Accounting

Periods and Methods.

Accounting Periods

All electing ANSTs must adopt a calendar year.

Rounding Off to Whole Dollars

You may round off cents to whole dollars on the ANST's

return and schedules. If you do round to whole dollars, you

must round all amounts. To round, drop amounts under 50

Instructions for Form 1041-N (Rev. 12-2025)

cents and increase amounts from 50 to 99 cents to the next

dollar. For example, $1.39 becomes $1 and $2.50

becomes $3.

Part I—General Information

If you have to add two or more amounts to figure the

amount to enter on a line, include cents when adding the

amounts and round off only the total.

Enter the exact name that was used to apply for the employer

identification number (EIN) for the trust to file Form 1041-N.

Estimated Tax

Generally, an ANST must pay estimated income tax if it

expects to owe at least $1,000 after subtracting withholding

and credits. For details and exceptions, see Form 1041-ES,

Estimated Income Tax for Estates and Trusts.

Interest and Penalties

Interest

Line 1—Name of Trust

Line 3a—Name and Title of Trustee

Enter the name and title (if any) of the trustee. If a fiduciary

relationship was created or terminated, file Form 56, Notice

Concerning Fiduciary Relationship.

If a fiduciary relationship wasn't created or terminated but

the fiduciary had a change in name or another fiduciary's

name was entered, check the “Change in fiduciary's name”

box on line 6.

Interest is charged on taxes not paid by the due date, even if

an extension of time to file is granted. Interest is also charged

on the failure-to-file penalty, the accuracy-related penalty,

and the fraud penalty. The interest charge is figured at a rate

determined under section 6621.

Line 3b—Address

Late Filing of Return

If you change your address after filing Form 1041-N, use

Form 8822-B, Change of Address or Responsible

Party—Business, to notify the IRS.

The law provides a penalty of 5% of the tax due for each

month, or part of a month, that the return isn’t filed up to a

maximum of 25% of the tax due. If the return is more than 60

days late, the minimum penalty is the smaller of $525 or the

tax due. The penalty won’t be imposed if you can show that

the failure to file on time is due to reasonable cause. If you

receive a notice about penalty and interest after you file this

return, send us an explanation and we will determine if you

meet reasonable-cause criteria. Don’t attach an explanation

when you file Form 1041-N.

For more information about penalties for late filing, see

Late Filing of Return in the Instructions for Form 1041.

Late Payment of Tax

Include the suite, room, or other unit number after the street

address. If the post office doesn't deliver mail to the street

address and you have a P.O. box, show the box number

instead of the street address.

If a different address from the prior year was entered and

Form 8822-B wasn't filed, check the box on line 6 for

“Change in fiduciary's address.”

Line 6

Be sure to check all the boxes that apply. Also, see the line 3a

and line 3b instructions above for information regarding a

change in the fiduciary's name and for information on

changes to the fiduciary's address.

Part II—Tax Computation

Section 6651 also provides for penalties for late payment.

Generally, the penalty for not paying the tax when due is 1/2 of

1% of the unpaid amount for each month or part of a month it

remains unpaid. The maximum penalty is 25% of the unpaid

amount. The penalty is imposed on the net amount due. Any

penalty is in addition to interest charges on late payments.

Income

Line 2a—Total Ordinary Dividends

Caution: If you include interest or either of these penalties

with your payment, identify and enter these amounts in the

bottom margin of Form 1041-N. Don’t include the interest or

penalty amount in the balance of tax due on line 18.

Line 2b—Qualified Dividends

Underpaid Estimated Tax

If the trustee underpaid estimated tax, use Form 2210,

Underpayment of Estimated Tax by Individuals, Estates, and

Trusts, to figure any penalty due. Enter the amount of the

penalty in the bottom margin of Form 1041-N. Don’t include it

in the balance of tax due on line 18.

Other Penalties

Other penalties can be imposed for negligence, substantial

understatement of tax, and fraud. See Pub. 17, Your Federal

Income Tax, for details on these penalties.

Specific Instructions

Enter the year (or period) for which you are filing for the

electing ANST.

Instructions for Form 1041-N (Rev. 12-2025)

Report the total of all ordinary dividends received during the

tax year.

Enter the ANST's total qualified dividends on line 2b and use

Part IV of Schedule D to figure the ANST's tax. Qualified

dividends are eligible for a lower tax rate than other ordinary

income. Generally, these dividends are shown in box 1b of

Form(s) 1099-DIV, Dividends and Distributions. See Pub.

550, Investment Income and Expenses, for the definition of

qualified dividends if you received dividends not reported on

Form 1099-DIV.

Exceptions. Some dividends may be reported as qualified

dividends in box 1b of Form 1099-DIV but aren't qualified

dividends. These include the following.

• Dividends received on any share of stock that the ANST

held for less than 61 days during the 121-day period that

began 60 days before the ex-dividend date. The ex-dividend

date is the first date following the declaration of a dividend on

which the purchaser of a stock isn't entitled to receive the

next dividend payment. When counting the number of days

the ANST held the stock, include the day you disposed of the

stock but not the day you acquired it.

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• Dividends attributable to periods totaling more than 366

days that the ANST received on any share of preferred stock

held for less than 91 days during the 181-day period that

began 90 days before the ex-dividend date. Preferred

dividends attributable to periods totaling less than 367 days

are subject to the 61-day holding period rule above.

• Dividends on any share of stock to the extent that the

ANST is under an obligation (including a short sale) to make

related payments with respect to positions in substantially

similar or related property.

• Payments in lieu of dividends, but only if you know or have

reason to know that the payments aren't qualified dividends.

Line 3—Capital Gain or (Loss)

Enter the gain from Schedule D, line 11, or the loss from

Schedule D, line 12.

Note: Report capital gain distributions on Form 1041-N,

Schedule D, line 7.

Line 4—Other Income

List the type and amount of income not included on lines 1a

through 3. List the types and amounts on an attached

schedule if the ANST has more than one item of other

income.

Include on line 4 taxable contributions received from an

ANC. See also Part III—Other Information, Question 1, later,

for additional information that may need to be attached to the

return. Include on this line income recognized on the early

disposition of noncash property for which the ANST

previously made a section 247(g) election. Report on

Schedule D the capital gain recognized on such disposition.

See Section 247(g) Election Property, later, for additional

information.

If the ANST is reporting global intangible low-taxed

income (GILTI), include it on the attached statement.

Complete and attach Form 8992.

For details on these and other limitations on deductions,

see Deductions in the Instructions for Form 1041.

Miscellaneous itemized deductions subject to the 2% floor

will not be allowed for tax years 2018 through 2025.

Line 9—Other Deductions

Attach a schedule listing by type and amount all allowable

deductions that aren't deductible elsewhere on the form. No

deduction is allowed for distributions to beneficiaries.

An ANST may elect under section 965(n) to determine the

amount of the net operating loss (NOL) for a tax year

determined under section 172 and the amount of taxable

income to be reduced by NOL carryovers or carrybacks to

such tax year without regard to certain amounts under

section 172. The amount not taken into consideration (the

reduction amount) is generally equal to the amount of the

section 965(a) inclusion (net of the section 965(c) deduction).

If, as a result of an election under section 965(n), the amount

of the NOL for the tax year is adjusted, the reduction amount

is included in other income on line 4. If, as a result of an

election under section 965(n), the taxable income reduced by

NOL carryovers or carrybacks is reduced, the NOL deduction

on line 4 is reduced by the reduction amount. See section

965(n) and the regulations thereunder for more information.

In determining whether an expense is deductible, it must

be determined whether the expense would be “commonly or

customarily” incurred by a hypothetical individual owning the

same property. A cost incurred by an ANST is an allowable

deduction to the extent that it is excluded from the definition

of miscellaneous itemized deductions under section 67(b)

and commonly or customarily would not be incurred by a

hypothetical individual holding the same property.

Include on line 9 the deduction for qualified business

income. For information on how to figure the trust's deduction

for qualified business income, see Form 8995, Qualified

Business Income Deduction Simplified Computation; and

Form 8995-A, Qualified Business Income Deduction.

Deductions

Allocation of Deductions for Tax-Exempt Income

Line 10—Reserved for Future Use

Generally, no deduction is allowed for any expense that is

allocable to tax-exempt income, such as interest on state or

local bonds.

Line 11—Exemption

Exceptions. State income taxes and business expenses

that are allocable to tax-exempt interest are deductible.

Expenses that are directly allocable to tax-exempt income

are allocable only to tax-exempt income. A reasonable

proportion of expenses indirectly allocable to both

tax-exempt income and other income must be allocated to

each class of income.

Limitations on Deductions

Generally, the amount an ANST has “at-risk” limits the loss it

can deduct in any tax year. Also, section 469 and its

regulations generally limit losses from passive activities to the

amount of income derived from all passive activities.

Similarly, credits from passive activities are generally limited

to the tax attributable to such activities.

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Don’t enter any information on line 10.

A trust whose governing instrument requires all income to be

distributed currently is allowed a $300 exemption, even if it

distributed amounts other than income during the tax year. All

other trusts are allowed a $100 exemption.

Tax and Payments

Line 14—Tax

If the ANST doesn't have a net capital gain or qualified

dividends and has an amount greater than zero on line 13,

check the first box on line 14, multiply the amount on line 13

by 10% (0.10), and enter the result on line 14.

Schedule D. If the ANST had a net capital gain (or qualified

dividends) and any taxable income, complete Part IV of

Schedule D, enter the tax (or -0-, if applicable) from line 28 of

Schedule D on line 14, and check the “Schedule D” box.

Instructions for Form 1041-N (Rev. 12-2025)

Line 15—Credits

Specify the type of credit being claimed or form number and

attach any required credit forms. If you are claiming more

than one type of credit, attach a schedule listing the type and

amount of each credit claimed. See the Instructions for Form

1041 for details on the credits that may be claimed.

should not file Form 1041-N for a period in which the trust is

exempt. See the Instructions for Form 990-T.

Line 20—Tax Due

Line 16—Total Tax

Payments made to the federal government must be

processed electronically. Go to IRS.gov/Payments for more

information on how to make a payment and also see EFTPS

and Same-day wire below.

If the ANST owes any additional taxes (for example,

recapture taxes), include these taxes on line 16. To the left of

the entry space, enter the type and amount of the tax. Also,

attach to Form 1041-N any forms required to figure these

taxes. See the Instructions for Form 1041 for more details on

additional taxes that may apply.

EFTPS. Payment of the tax due may be submitted

electronically through the Electronic Federal Tax Payment

System (EFTPS). EFTPS is a free service of the Department

of the Treasury.

Go to IRS.gov/EFTPS and EFTPS.gov for more

information.

If the ANST shows more than one type of additional tax on

this line, attach a schedule showing the type and amount of

each tax, and include the total of all additional taxes on this

line.

Report on this line of an amended return the additional

10% tax for the year in which the ANST received a

contribution of noncash property from an ANC, and elected

to defer the recognition of income under section 247(g), but

disposed of the property within the first tax year subsequent

to the tax year the ANST received the property. The increase

in tax due to the inclusion of the deferred income, which is

the base amount for the computation of the additional 10%

tax shown on this line, should be included on line 14. If the

amended return also shows changes to income, deductions,

or credits unrelated to the inclusion of the deferred income,

attach a schedule showing the computation of the additional

tax due only to the inclusion of the deferred income. See also

Part III—Other Information, Question 1, later, for the

statement to be attached to the amended return.

Line 17—Current Year Net 965 Tax Liability Paid

If the ANST made a payment with respect to a current year

net 965 tax liability resulting from an S-corporation triggering

event, enter on line 17 the amount of the payment reported in

Form 965-A, Part II, column (k), for the current year.

Line 18—Payments

Include on line18 any:

• Estimated tax payments made for the tax year;

• Tax paid with a request for an extension of time to file;

• Federal income tax withheld (for example, backup

withholding);

• Payment made in the current year with respect to a net 965

tax liability; and

• Credit for tax paid on undistributed capital gains. Attach

Copy B of Form 2439, Notice to Shareholder of Undistributed

Long-Term Capital Gains.

Line 19—Elective Payment Election

Enter any elective payment election amount from Form 3800,

Part III, line 6, column (j). See the Instructions for Form 3800.

Same-day wire. Payment of the tax due may be submitted

electronically through same-day wire from your financial

institution. Contact your financial institution for availability,

cost, and time frames. Go to IRS.gov/SameDayWire for more

information.

Paying by check. Make the check payable to “United

States Treasury.” Write the donor’s taxpayer identification

number and “Form 1041–N” to assist us in posting it to the

proper account. Go to IRS.gov/PayByMail for more

information.

Paying by cash. You may be able to pay your balance

due with cash at a participating retail store. Go to IRS.gov/

PayByCash for more information.

Line 21—Overpayment

If you have access to U.S. banking services, you should use

direct deposit for any refunds, whenever possible. Go to

IRS.gov/DirectDeposit for more information.

If there’s an overpayment, complete Part II, lines 22c–22e,

to enter your banking information and receive your refund by

direct deposit.

Line 22a

Credited to next year’s estimated tax Enter on line 22a

the amount, if any, of the overpayment on line 21 you want

applied to your 2026 estimated tax. We will apply this amount

to your account unless you include a statement requesting us

to apply it to your spouse's account. Include your spouse's

social security number in the statement.

Line 22b

Enter the amount of overpayment that you would like to

receive as a refund.

Line 22c

The routing number for your financial institution must be nine

digits. The first two digits must be 01 through 12 or 21

through 32. Otherwise, the direct deposit will be rejected and

a check sent instead.

Note: An ANST that has applied for tax-exempt status and

been recognized as exempt under section 501(a) should use

Form 990-T, Exempt Organization Business Income Tax

Return, when making an elective payment election, and

Instructions for Form 1041-N (Rev. 12-2025)

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Line 22d

Check the appropriate box for the type of account. Don't

check more than one box. You must check the correct box to

ensure your deposit is accepted.

Line 22e

The account number can be up to 17 characters (both

numbers and letters). Include hyphens but omit spaces and

special symbols. Enter the number from left to right and leave

any unused boxes blank. Don't include the check number.

Part III—Other Information

Question 1

If you answer “Yes” to this question, attach the following

information, as necessary.

Assignment of income under section 139G. Attach a

copy of the written assignment received from the ANC. See

Income Assignment From a Native Corporation, earlier, for

how to report the assigned income.

Property for which the ANC made an election under

section 247(e). Attach the statement required under section

6039H(e) received from the ANC. If the ANST elects under

section 247(g) to defer recognition of income related to any

noncash property received from the ANC, clearly identify on

the statement for which noncash property the ANST is

making the election and describe the property (if the

statement from the ANC does not describe it). Include in

other income (line 4) the amount of income otherwise

required to be recognized by the ANST.

All other property. Attach a description of the property, the

date the ANST received the property, and the FMV of the

property on that date.

Revocation of prior section 247(g) election by the ANST.

Attach a copy of the statement attached to the return on

which the ANST made the election. Clearly identify on the

statement the noncash property for which the ANST is

revoking the prior election. For noncash property for which

the ANST is revoking the prior election, include on the

appropriate line of the amended return (and attach any

required supporting schedules) the additional income the

ANST recognized as a result of revoking the election. For

each property for which the ANST both revokes the election

and does not recognize additional income, attach a

statement that identifies such property and the reason for not

recognizing additional income.

Early disposition of property for which the ANST made

a section 247(g) election. An early disposition of property

for which the ANST made a section 247(g) election is a

disposition that occurs during the first tax year subsequent to

the tax year in which such property was contributed to the

ANST. Attach a copy of the statement attached to the return

on which the ANST made the election. Clearly identify on the

statement the noncash property the ANST sold or exchanged

during the tax year. For each early disposition of noncash

property, include on the appropriate line of the amended

return (and attach any required supporting schedules) the

additional income the ANST recognized. For each property

sold or exchanged for which the ANST does not recognize

additional income, attach a statement that identifies such

property and the reason for not recognizing additional

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income. See also the instructions for line 18 for how to report

the additional tax due on the sale or exchange of the asset.

Question 2

The ANST may be required to file Form 3520, Annual Return

To Report Transactions With Foreign Trusts and Receipt of

Certain Foreign Gifts, if any of the following apply.

• It directly or indirectly transferred property or money to a

foreign trust. For this purpose, any U.S. person who created a

foreign trust is considered a transferor.

• It is treated as the owner of any part of the assets of a

foreign trust under the grantor trust rules.

• It received a distribution from a foreign trust.

Note: An owner of a foreign trust must ensure that the trust

files Form 3520-A, Annual Information Return of Foreign Trust

With a U.S. Owner.

Question 3

Check the “Yes” box and enter the name of the foreign

country if either (1) or (2) below applies.

1. The ANST owns more than 50% of the stock in any

corporation that owns one or more foreign bank accounts.

2. At any time during the year, the ANST had an interest

in or signature or other authority over a bank, securities, or

other financial account in a foreign country.

Exception. Check “No” if either of the following applies to the

ANST.

• The combined value of the accounts was $10,000 or less

during the whole year.

• The accounts were with a U.S. military banking facility

operated by a U.S. financial institution.

Refer to FinCEN Form 114, Report of Foreign Bank and

Financial Accounts (FBAR), to see if the ANST is considered

to have an interest in or signature or other authority over a

bank, securities, or other financial account in a foreign

country.

If you checked “Yes” for Question 3, electronically file

FinCEN Form 114 with the Department of the Treasury using

FinCEN's BSA E-Filing System. Because FinCEN Form 114

isn't a tax form, don't file it with Form 1041-N.

Go to FinCEN.gov for more information.

Caution: If you are required to file FinCEN Form 114 but

don't, you may have to pay a penalty of up to $10,000 (or

more in some cases).

Question 4

For tax years beginning after tax years 2015, a domestic

trust, including an ANST, that is formed or availed of to hold

specified foreign financial assets (“a specified domestic

entity”) must file Form 8938 with its Form 1041-N for the tax

year. Form 8938 must be filed each year the value of the

trust's specified foreign financial assets equals or exceeds

the reporting threshold. For more information on domestic

trusts that are specified domestic entities and the types of

foreign financial assets that must be reported, see the

Instructions for Form 8938, generally, and in particular, Who

Must File, Specified Domestic Entity, Reporting Thresholds,

Specified Foreign Financial Assets, Interests in Specified

Foreign Financial Assets, Assets Not Required To Be

Reported, and Exceptions to Reporting.

Instructions for Form 1041-N (Rev. 12-2025)

An ANST required to file Form 8938 with its Form 1041-N

for the tax year should check “Yes” for Question 4 in Part III of

Form 1041-N.

Use Form 8992, U.S. Shareholder Calculation of Global

Intangible Low-Taxed Income (GILTI), to report the ANST’s

GILTI.

Question 5

Use Form 8995, Qualified Business Income Deduction

Simplified Computation; and Form 8995-A, Qualified

Business Income Deduction, to figure the qualified business

income deduction.

To make the section 643(e)(3) election to recognize gain on

property distributed in kind, check the box and complete

Schedule D. For more information, see Section 643(e)(3)

Election, later.

Schedule D—Capital Gains and

Losses

General Instructions

Purpose of Schedule

Use Schedule D to report gains and losses from the sale or

exchange of capital assets by an ANST.

Details of each transaction must be reported on this

schedule. If there are more transactions than spaces on

line 1 or 5, you can report the transactions on an attached

statement containing all the same information as Schedule D

using a similar format. Enter on Schedule D, lines 1 and 5, as

appropriate, the totals from all attached statements for lines 1

and 5.

Other Forms You May Have To File

Use Form 461, Limitation on Business Losses, to report the

excess business loss that is reported on your noncorporate

tax return.

Use Form 965-A, Individual Report of Net 965 Tax Liability,

to report the net 965 tax liability.

Use Form 4797, Sales of Business Property, to report the

following.

• The sale or exchange of property used in a trade or

business.

• The sale or exchange of depreciable and amortizable

property.

• The involuntary conversion (other than from casualty or

theft) of property and capital assets held for business or

profit.

• The disposition of noncapital assets other than inventory

or property held primarily for sale to customers in the ordinary

course of a trade or business.

Use Form 4684, Casualties and Thefts, to report

involuntary conversions of property due to casualty or theft.

Use Form 6781, Gains and Losses From Section 1256

Contracts and Straddles, to report gains and losses from

section 1256 contracts and straddles.

Use Form 8824, Like-Kind Exchanges, if the ANST made

one or more like-kind exchanges. A like-kind exchange

occurs when the ANST exchanges business or investment

property for property of a like kind.

Use Form 8938, Statement of Specified Foreign Financial

Assets.

Capital Asset

Each item of property held by the ANST is a capital asset,

except for the following.

• Stock in trade, inventory, or property held primarily for sale

to customers.

• Depreciable or real property used in a trade or business.

• Certain patents, inventions, models, or designs (whether

or not patented); secret formulas or processes; or similar

property (see section 1221(a)(3)).

• Copyrights; literary, musical, or artistic compositions;

letters or memoranda; or similar property eligible for

copyright protection that the trust received from someone

whose personal efforts created them or for whom they were

created in a way (such as by gift) that entitled the trust to the

basis of the previous owner (in the case of letters,

memoranda, or similar property, such property may also be

prepared or produced for the trust).

Note: Pursuant to section 1221(b)(3), the trust can elect to

treat musical compositions and copyrights in musical works

as capital assets if it sold or exchanged them in a tax year

beginning after May 17, 2006, and acquired the assets under

circumstances entitling it to the basis of the person who

created the property or for whom it was prepared or

produced.

• Accounts or notes receivable acquired in the ordinary

course of a trade or business for services rendered or from

the sale of inventoriable assets or property held primarily for

sale to customers.

• Certain U.S. Government publications not purchased at

the public sale price.

• Certain “commodities derivative financial instruments” held

by a dealer (see section 1221(a)(6)).

• Certain hedging transactions entered into in the normal

course of the ANST's trade or business (see section 1221(a)

(7)).

• Supplies regularly used in the ANST's trade or business.

You may find additional helpful information in Pub. 544,

Sales and Other Dispositions of Assets; and Pub. 551, Basis

of Assets.

Section 247(g) Election Property

Early disposition of section 247(g) property. An early

disposition of property for which the ANST made a section

247(g) election is a disposition that occurs during the first tax

year subsequent to the tax year in which such property was

contributed to the ANST. The ANST must amend the tax

return for the year in which the ANST received the

contributed property to report on line 4 the amount of income

that would have been included in that year but for the

election.

Other dispositions of section 247(g) property. Report

on line 4 the amount of income deferred as a result of making

the section 247(g) election. Also report any additional gain or

7

Capital Loss Carryover Worksheet

Use this worksheet to figure the ANST's capital loss carryovers from the current tax year to the following tax year if Schedule D, line 12, is a loss and (a) the

loss on Schedule D, line 11, is more than $3,000; or (b) Form 1041-N, page 1, line 13, is a loss.

1. Enter taxable income (or loss) from Form 1041-N, line 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.

2. Enter loss from Schedule D, line 12, as a positive amount

................................................

2.

3. Enter amount from Form 1041-N, line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.

4. Adjusted taxable income. Combine lines 1, 2, and 3. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.

5. Enter the smaller of line 2 or line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5.

Note: If line 4 of Schedule D is a loss, go to line 6; otherwise, enter -0- on line 6 and go to line 10.

6. Enter loss from Schedule D, line 4, as a positive amount

.................................................

7. Enter gain, if any, from Schedule D, line 10. If that line is blank or shows a loss, enter -0- . . . . . . . .

8. Add lines 5 and 7

6.

7.

............................................................................

8.

9. Short-term capital loss carryover. Subtract line 8 from line 6. If zero or less, enter -0-. Enter this loss on the short-term

capital loss carryover line of next year's Schedule D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.

Note: If line 10 of Schedule D is a loss, go to line 10; otherwise, skip lines 10 through 14.

10. Enter loss from Schedule D, line 10, as a positive amount

................................................

11. Enter gain, if any, from Schedule D, line 4. If that line is blank or shows a loss, enter -0- . . . . . . . . .

11.

12. Subtract line 6 from line 5. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12.

13. Add lines 11 and 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13.

14. Long-term capital loss carryover. Subtract line 13 from line 10. If zero or less, enter -0-. Enter this loss on the long-term

capital loss carryover line of next year's Schedule D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14.

loss on the disposition of property as if there were no section

247(g) election, following these Schedule D instructions.

Note: Section 267 doesn't allow an ANST to claim a loss on

the disposition of property to a related party. In addition,

when an ANST disposes of depreciable property to a related

party, section 1239 applies to deny capital gains treatment for

any gain.

Short-Term or Long-Term

Separate the capital gains and losses according to how long

the ANST held or owned the property. The holding period for

short-term capital gains and losses is 1 year or less. The

holding period for long-term gains and losses is more than 1

year.

To figure the length of the period the ANST held property,

begin counting on the day after the ANST acquired the

property and include the day the ANST disposed of it. Use

the trade dates for the date of acquisition and sale of stocks

and bonds traded on an exchange or over-the-counter

market.

For property received by the ANST from an ANC for which

the ANC made an election under section 247(e)(1), the

ANST's holding period includes the period the ANC held the

property.

Section 643(e)(3) Election

For in-kind noncash property distributions, a fiduciary may

elect to have the ANST recognize gain or loss in the same

manner as if the distributed property had been sold to the

beneficiary at its FMV. If the election is made, the

beneficiary's basis of such property is its FMV. This election

applies to all distributions made by the ANST during the tax

year and, once made, may be revoked only with IRS consent.

8

10.

Note: Section 267 doesn't allow an ANST to claim a

deduction for any loss on property to which a section 643(e)

(3) election applies. In addition, when an ANST distributes

depreciable property, section 1239 applies to deny capital

gains treatment for any gain on property to which a section

643(e)(3) election applies.

For more information on making the section 643(e)(3)

election, see Part III—Other Information, Question 5, earlier.

Column (d)—Sales Price

Enter either the gross sales price or the net sales price from

the sale. On sales of stocks and bonds, report the gross

amount as reported to the ANST on Form 1099-B, Proceeds

From Broker and Barter Exchange Transactions, or similar

statement. However, if the ANST was advised that gross

proceeds less commissions and option premiums were

reported to the IRS, enter only the net amount in column (d).

Column (e)—Cost or Other Basis

Generally, the basis of property acquired by gift is the same

as its basis in the hands of the donor. However, if the FMV of

the property at the time it was transferred to the trust is less

than the transferor's basis, then the FMV is used for

determining any loss on disposition.

For property received by the ANST from an ANC for which

the ANC made an election under section 247(e)(1), the

ANST's basis in the property is the lesser of the adjusted

basis of the ANC in the property immediately before the

contribution, or the FMV of the property immediately before

the contribution.

If the property was transferred to the ANST and a gift tax

was paid under chapter 12, then increase the donor's basis

as follows: multiply the amount of the gift tax paid by a

Instructions for Form 1041-N (Rev. 12-2025)

fraction, the numerator of which is the net appreciation in

value of the gift (defined below), and the denominator of

which is the amount of the gift. For this purpose, the net

appreciation in value of the gift is the amount by which the

FMV of the gift exceeds the donor's adjusted basis. Then,

add the result to the donor's basis.

Adjustments to basis. Before figuring any gain or loss on

the sale, exchange, or other disposition of property owned by

the ANST, adjustments to the property's basis may be

required. See Pub. 551 for additional information.

Column (f)—Gain or (Loss)

Make a separate entry in this column for each transaction

reported on lines 1 and 5 and any other lines that apply to the

ANST. For lines 1 and 5, subtract the amount in column (e)

from the amount in column (d). Enter negative amounts in

parentheses.

Line 23

Add line 18 from the Unrecaptured Section 1250 Gain

Worksheet and line 7 from the 28% Rate Gain Worksheet.

Exclusion of gain on qualified small business (QSB)

stock. Section 1202 allows you to exclude a portion of the

eligible gain on the sale or exchange of certain QSB stock.

How to report. Report on line 5 of Schedule D the gain

realized on the sale of QSB stock. Complete all columns as

indicated. Directly below the line on which you report the

gain, enter in column (a) “Section 1202 exclusion” and enter

as a loss in column (f) the amount of allowable exclusion. If

you are completing line 23 of Schedule D, enter as a positive

number the amount of your allowable exclusion on line 2 of

the 28% Rate Gain Worksheet; if you excluded 60% of the

gain, enter 2/3 of the exclusion; if you excluded 75% of the

gain, enter 1/3 of the exclusion. Don’t make an entry for any

section 1202 exclusion that is 100% of the gain.

For more information about QSB stock, see the

Instructions for Schedule D (Form 1041).

Unrecaptured Section 1250 Gain

Complete the Unrecaptured Section 1250 Gain Worksheet if

any of the following apply.

• During the tax year, the ANST sold or otherwise disposed

of section 1250 property (generally, real property that was

depreciated) held more than 1 year.

• The ANST received installment payments during the tax

year for section 1250 property held more than 1 year for

which it is reporting gain on the installment method.

• The ANST received a Schedule K-1 from an estate or trust,

partnership, or S corporation that shows “unrecaptured

section 1250 gain” reportable for the tax year.

• The ANST received a Form 1099-DIV or Form 2439 from a

real estate investment trust or regulated investment company

(including a mutual fund) that reports “unrecaptured section

1250 gain” for the tax year.

• The ANST reported a long-term capital gain from the sale

or exchange of an interest in a partnership that owned

section 1250 property.

Instructions for the Unrecaptured Section 1250

Gain Worksheet

Instructions for Form 1041-N (Rev. 12-2025)

Lines 1 through 3. If the ANST had more than one property

described on line 1, complete lines 1 through 3 for each

property on a separate worksheet. Enter the total of the line 3

amounts for all properties on line 3 and go to line 4.

Line 4. To figure the amount to enter on line 4, follow the

steps below for each installment sale of trade or business

property held more than 1 year.

Step 1. Figure the smaller of (a) the depreciation allowed

or allowable, or (b) the total gain for the sale. This is the

smaller of line 22 or line 24 of the 2025 Form 4797 (or the

comparable lines of Form 4797 for the year of sale) for that

property.

Step 2. Reduce the amount figured in Step 1 by any

section 1250 ordinary income recapture for the sale. This is

the amount from line 26g of the 2025 Form 4797 (or the

comparable line of Form 4797 for the year of sale) for that

property. The result is the total unrecaptured section 1250

gain that must be allocated to the installment payments

received from the sale.

Step 3. Generally, the amount of section 1231 gain on

each installment payment is treated as unrecaptured section

1250 gain until the total unrecaptured section 1250 gain

figured in Step 2 has been used in full. Figure the amount of

gain treated as unrecaptured section 1250 gain for

installment payments received during the tax year as the

smaller of (a) the amount from line 26 or line 37 of the 2025

Form 6252 (or comparable lines for the current tax year),

whichever applies; or (b) the amount of unrecaptured section

1250 gain remaining to be reported. This amount is generally

the total unrecaptured section 1250 gain for the sale reduced

by all gain reported in prior years (excluding section 1250

ordinary income recapture). However, if you chose not to

treat all of the gain from payments received after May 6,

1997, and before August 24, 1999, as unrecaptured section

1250 gain, use only the amount you chose to treat as

unrecaptured section 1250 gain for those payments to

reduce the total unrecaptured section 1250 gain remaining to

be reported for the sale. Include this amount on line 4.

Line 10. Include on line 10 the ANST's share of the

partnership's unrecaptured section 1250 gain that would

result if the partnership had transferred all of its section 1250

property in a fully taxable transaction immediately before the

ANST sold or exchanged its interest in that partnership. If the

ANST recognized less than all of the realized gain, the

partnership will be treated as having transferred only a

proportionate amount of each section 1250 property.

Line 12. An example of an amount to include on line 12 is

unrecaptured section 1250 gain from the sale of a vacation

home previously used as a rental property but converted to

personal use prior to the sale.

Installment sales. To figure the amount to include on

line 12, follow the steps below for each installment sale of

property held more than 1 year for which you didn’t make an

entry in Part I of Form 4797 for the year of sale.

Step 1. Figure the smaller of (a) the depreciation allowed

or allowable, or (b) the total gain for the sale. This is the

smaller of line 22 or line 24 of the 2025 Form 4797 (or

comparable lines of Form 4797 for the year of sale) for that

property.

Step 2. Reduce the amount figured in Step 1 by any

section 1250 ordinary income recapture for the sale. This is

the amount from line 26g of the 2025 Form 4797 (or the

comparable line of Form 4797 for the year of sale) for that

property. The result is the total unrecaptured section 1250

9

Unrecaptured Section 1250 Gain Worksheet

If the ANST isn't reporting a gain on Form 4797, Sales of Business Property, line 7 (for 2025, or the comparable line for the current tax year),

skip lines 1 through 9 and go to line 10.

1. If the ANST has section 1250 property in Part III of Form 4797 for which you made an entry in Part I of Form 4797 (but not on

Form 6252, Installment Sale Income), enter the smaller of line 22 or line 24 of Form 4797 (for 2025, or the comparable line for

the current tax year) for that property. If the ANST did not have any such property, go to line 4. If it had more than one such

property, see instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.

2. Enter the amount from Form 4797, line 26g (for 2025, or the comparable line for the current tax year), for the property for which

you made an entry on line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.

3. Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.

4. Enter the total unrecaptured section 1250 gain included on line 26 or line 37 of Form(s) 6252 (for 2025, or the comparable line

4.

for the current tax year) from installment sales of trade or business property held more than 1 year. See instructions . . . . . . .

5. Enter the total of any amounts reported to the ANST on a Schedule K-1 from a partnership or an S corporation as

5.

“unrecaptured section 1250 gain” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6. Add lines 3 through 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.

7. Enter the smaller of line 6 or the gain from Form 4797, line 7 (for 2025, or the comparable line for

7.

the current tax year) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8. Enter the amount, if any, from Form 4797, line 8 (for 2025, or the comparable line for the current tax

8.

year) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9. Subtract line 8 from line 7. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.

10. Enter the amount of any gain from the sale or exchange of an interest in a partnership attributable to unrecaptured section 1250

10.

gain. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11. Enter the total of any amounts reported to the ANST on a Schedule K-1, Form 1099-DIV, or Form 2439 as “unrecaptured

section 1250 gain” from an estate, trust, real estate investment trust, or mutual fund (or other regulated investment

company) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11.

12. Enter the total of any unrecaptured section 1250 gain from sales (including installment sales) or other dispositions of section

1250 property held more than 1 year for which you did not make an entry in Part I of Form 4797 for the year of sale. See

instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12.

13. Add lines 9 through 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13.

14. If the ANST had any section 1202 gain or collectibles gain or (loss), enter the total of lines 1 through

4 of the 28% Rate Gain Worksheet. Otherwise, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14.

15. Enter the (loss), if any, from Schedule D, line 4. If Schedule D, line 4, is zero or a gain,

enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.

16. Enter the ANST's long-term capital loss carryover from Schedule D, line 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

)

16. (

17. Combine lines 14 through 16. If the result is zero or a gain, enter -0-. If the result is a (loss), enter it as a positive

amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17.

18. Unrecaptured section 1250 gain. Subtract line 17 from line 13. If zero or less, enter -0-. Combine this result with the result on

line 7 of the 28% Rate Gain Worksheet, if any, and enter that result on Schedule D, line 23 . . . . . . . . . . . . . . . . . . . . . . . . . .

18.

gain that must be allocated to the installment payments

received from the sale.

Step 3. Generally, the amount of capital gain on each

installment payment is treated as unrecaptured section 1250

gain until the total unrecaptured section 1250 gain figured in

Step 2 has been used in full. Figure the amount of gain

treated as unrecaptured section 1250 gain for installment

payments received during the tax year as the smaller of (a)

the amount from line 26 or line 37 of the 2025 Form 6252 (or

comparable lines for the current tax year), whichever applies;

or (b) the amount of unrecaptured section 1250 gain

remaining to be reported. This amount is generally the total

unrecaptured section 1250 gain for the sale reduced by all

gain reported in prior years (excluding section 1250 ordinary

income recapture). However, if you chose not to treat all of

the gain from payments received after May 6, 1997, and

before August 24, 1999, as unrecaptured section 1250 gain,

use only the amount you chose to treat as unrecaptured

section 1250 gain for those payments to reduce the total

unrecaptured section 1250 gain remaining to be reported for

the sale. Include this amount on line 12.

Other sales or dispositions of section 1250 property.

For each sale of property held more than 1 year (for which an

entry wasn't made in Part I of Form 4797), figure the smaller

of (a) the depreciation allowed or allowable, or (b) the total

gain for the sale. This is the smaller of line 22 or line 24 of

Form 4797 (for 2025, or the comparable line for the current

tax year) for that property. Next, reduce that amount by any

section 1250 ordinary income recapture for the sale. This is

10

the amount from line 26g of Form 4797 (for 2025, or the

comparable line for the current tax year) for that property. The

result is the total unrecaptured section 1250 gain for the sale.

Include this amount on line 12.

28% Rate Gain or (Loss)

Complete the 28% Rate Gain Worksheet if lines 10 and 11 of

Schedule D are both greater than zero and the ANST reports

in Part II, column (f), either:

• A section 1202 gain on QSB stock, or

• A collectibles gain or (loss).

A collectibles gain or (loss) is any long-term gain or

deductible long-term loss from the sale or exchange of a

collectible that is a capital asset.

Collectibles include works of art, rugs, antiques, metals

(such as gold, silver, and platinum bullion), gems, stamps,

coins, alcoholic beverages, and certain other tangible

property.

Also, include gain (but not loss) from the sale or exchange

of an interest in a partnership, S corporation, or trust held for

more than 1 year and attributable to unrealized appreciation

of collectibles. For details, see Regulations section 1.1(h)-1.

Also, attach the statement required under Regulations

section 1.1(h)-1(e).

28% Rate Gain Worksheet

1. Enter the total of all collectibles gain or (loss) from items reported in Schedule D, line 5, column (f) . . . . . . . . . . . . . . . . . . . .

1.

2. Enter any of the following as a positive number.

• Any section 1202 exclusion reported in Schedule D, line 5, column (f), that is 50% of the gain.

• 2/3 of any section 1202 exclusion reported in Schedule D, line 5, column (f), that is 60% of the gain.

• 1/3 of any section 1202 exclusion reported in Schedule D, line 5, column (f), that is 75% of the gain.

Don’t make an entry for any section 1202 exclusion that is 100% of the gain.

Total

.....................................................................................

3. Enter the total of all collectibles gain or (loss) from items reported on Schedule D, line 6

2.

...........................

3.

4. Enter the total of all collectibles gain from capital gain distributions reported on Schedule D, line 7 . . . . . . . . . . . . . . . . . . . .

4.

5. Enter the long-term capital loss carryover from Schedule D, line 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5. (

6. If Schedule D, line 4, is a (loss), enter that (loss) here. Otherwise, enter -0-

....................................

6.

7. Combine lines 1 through 6. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.

Schedule K—Distributions to

Beneficiaries

Use this schedule to report the type and amount of

distributions that were made to each beneficiary. A copy of

this schedule must be furnished to the sponsoring ANC. The

sponsoring ANC, not the ANST, provides information to the

beneficiaries regarding distributions. Distributions for each

year are considered to have been made in the following

order.

Tier I Distributions (Section 646(e)(1))

These are distributions from the ANST to the extent of the

ANST's taxable income, reduced by any income tax paid by

the ANST on that income, and increased by any tax-exempt

interest income.

)

election was in effect), but that have not, in fact, been

distributed in any prior year.

Tier II distributions are excluded from the gross income of

the beneficiary.

Tier III Distributions (Section 646(e)(3))

These are distributions considered to have been made by the

sponsoring ANC with respect to its stock.

Tier III distributions are taxable to beneficiaries as

dividends, to the extent of current or accumulated earnings

and profits of the sponsoring ANC (after adjustment for

distributions made by the sponsoring ANC during the year).

Section 643(e) applies for purposes of determining the

amount of a Tier III distribution of property (other than cash).

Tier IV Distributions (Section 646(e)(4))

Tier I distributions are excluded from the gross income of

the beneficiary.

Tier II Distributions (Section 646(e)(2))

These are distributions of any amounts that remain after

applying the above rules. They are considered as amounts in

excess of distributable net income for the year.

These are distributions of amounts that would have been Tier

I distributions in prior years (during which a section 646

Tier IV distributions are excluded from the gross income of

the beneficiary.

Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the

United States. You are required to give us the information to obtain benefit. Our legal right to ask for this information is in Internal

Revenue Code section 646. We need it to ensure that you are complying with these laws and to allow us to figure and collect

the right amount of tax. You are not required to provide the information requested on a form that is subject to the Paperwork

Reduction Act unless the form displays a valid OMB control number. Books or records relating to a form, or its instructions must

be retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax

returns and return information are confidential, as required by section 6103. The time needed to complete and file this form will

vary depending on individual circumstances. The estimated burden for trusts filing this form is approved under OMB control

number 1545-0092 and is included in the estimates shown in the Instructions for Form 1041.

If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we

would be happy to hear from you. You can send us comments through IRS.gov/FormComments. Or you can send your

comments to Internal Revenue Service, Tax Forms and Publications, 1111 Constitution Ave. NW, IR-6526, Washington, DC

20224. Don’t send the tax form to this address. Instead, see Where To File, earlier.

Instructions for Form 1041-N (Rev. 12-2025)

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