Tax Information
Trust I accounts that are funded are subject to taxation for all interest, dividends, and their share of market gains and losses incurred during a year. Each year, The Arc of Indiana's Trustee – The National Bank of Indianapolis – prepares and files Federal Form 1041 and Indiana Form IT-41 for all funded Trust I accounts. The $100 fee for preparing these forms and any amount owed to the United States Treasury and Indiana Department of Revenue are deducted from the trust.
If disbursements have been made from the account, the Key Person will need to prepare and file a Federal Form 1040 and Indiana Form IT-40 on behalf of the Beneficiary. In order to prepare these forms, the Key Person will need a Form K-1 or a Grantor Tax Letter, depending on what type of account it is. The National Bank of Indianapolis prepares the Form K-1 or Grantor Tax Letter and mails it to the Key person prior to April 15. The fee for preparing this form is included in the $100 tax preparation fee.
If no disbursements have been made from a Trust I account during the year, a Form K-1 or Grantor Tax Letter will not be issued.
We recommend that all tax questions be directed to a qualified tax preparer.