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Form 1041 NR US Income Tax Return for Foreign Estates & Trusts 2007 OMB No.

AICPA Draft #5. Department of the Treasury ― Internal Revenue Service. Form 1041 NR US Income Tax Return for Foreign Estates & Trusts 2007 OMB No. A Type of Entity (See Instructions):. Calendar year 2007 or fiscal year beginning , 2007 & ending.

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Form 1041 NR US Income Tax Return for Foreign Estates & Trusts 2007 OMB No.

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  1. AICPA Draft #5 Department of the Treasury ― Internal Revenue Service Form 1041NRUS Income Tax Return for Foreign Estates & Trusts 2007 OMB No. AType of Entity (See Instructions): Calendar year 2007 or fiscal year beginning , 2007 & ending Decedent’s Estate Simple Trust-Non-Grantor Trust Complex Trust- Non-Grantor Trust Grantor Trust with Foreign Owner C Employer Identification Number Entity Name/Address: D Date Entity Created: ________________ Created in Country: ________________ E Nonexempt charitable and split-interest Grantor Trust with US Owner trusts. Check applicable boxes. Trustee or Executor Name/Address: Described in Section 4947(a)(1) (Indicate on Page 2 Applicable Code Section) Not a Private Foundation Qualified Domestic Trust (QDOT) Described in Section 4947(a)(2) attached. B F Number of Schedules K-1s Final Check Initial Return Change in Trust’s Name Amended Return Applicable Return (See Instructions)…► Change in Fiduciary Change in Fiduciary’s Address Change in Fiduciary’s Name Boxes: 1 1 Interest Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2a Total ordinary dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 b Qualified dividends allocable to: (1) Beneficiaries_______ (2) Estate/Trust ____________ 3 3 Business income or (loss). Attach Schedule C or C-EZ (Form 1040) . . . . . . . . . . . . . . . . . . . . 4 Capital gain or (loss). Attach Schedule D (Form 1041NR) (US Sources) ……………………. 5 Rents, royalties, partnerships, other estates and trusts, etc. Attach Schedule E (Form 1040). . 6 Farm income or (loss). Attach Schedule F (Form 1040). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Ordinary gain or (loss). Attach Form 4797. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Other income. List type and amount. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Tax exempt income IRC: a) Section Ref.__________ b) US Tax Treaty Ref: __________. . . 4 5 Income 6 7 8 9 10 10 Total Income. Combine lines 1, 2a, and 3 through 9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ► 11 11 Interest. Check if Form 4952 is attached ► . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 12 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Fiduciary fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Charitable deduction (from Schedule A, Line 7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Attorney, accountant, and return preparer fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16a Other deductions not subject to the 2% floor (attach schedule). . . . . . . . . . . . . . . . . . . . . . . . . 16b Allowable miscellaneous itemized deductions subject to the 2% floor. . . . . . . . . . . . . . . . . . . 17 Add lines 11 through 16b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . ► 18 Adjusted total income or (loss). Subtract Line 17 from Line 10. . 13 14 15 16a Deductions 16b 17 18 18 19 19 Income distribution deduction (from Schedule B, Line 15). Attach Schedules K-1 (Form 1041NR). . 20 20 Estate tax deduction including certain generation-skipping taxes (attach computation). . . . . . 21 Exemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 22 Add Lines 19 through 21. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ► 22 23 Taxable income. Subtract Line 22 from Line 18. If a loss, see instructions. . . . . . . . . . . . . . .. 23 24 24 Total tax (from Schedule C, Line 8)……………………………………………………………. 25a Payments: a 2007 estimated tax payments and amount applied from 2006 return. . . . . . . . . . b Estimated tax payments allocated to beneficiaries (from Form 1041NR-T). . . . . . . . . . . . . . . . . c Subtract Line 25b from Line 25a. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d Tax paid with Form 7004 (see instructions). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e Federal income tax withheld at source. If any is from Form(s) 1099, check► f Credit for federal tax paid. Attach Forms 1042-S, 8288-A, 8805, 8885. . . . . . . . . . . . . . . . . . . . ….. 25 25b 25c 25d Tax & 25e Page 4, Line 85 Payments 25f g Less: US withholding tax payments allocated to beneficiaries (from Form 1041NR-T)………… 25g Other payments: h Form 1116 __________ i Form 2439__________ j Form 4136_________ Total… 25k 26 26 Total payments. Add Lines 25c through 25f and 25 j……………………………………….... Estimated tax penalty (see instructions) ………………………………………………………. Tax due. If Line 26 is smaller than the total of Lines 24 and 27, enter amount owed….. …. . Overpayment. If Line 26 is larger than the total of Lines 24 and 27, enter amount overpaid.. Amount of Line 29 to be Credited to 2008 estimated tax ► b Refunded 27 27 28 28 29 29 30 30 Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements and to the best of my knowledge and belief, Sign it is correct and complete. Declaration of preparer (other than taxpayer) is based on all information which preparer has any knowledge. May the IRS discuss this return Here ► ► with the preparer shown below? (See Instructions) Signature of fiduciary or officer representing fiduciary Date EIN of fiduciary if a financial institution Yes No Date Preparer’s SSN or PTIN Preparer’s Check if self- ► Signature ► employed Paid Firm’s name EIN Preparer’s (or yours if ► Use Only Phone Number self-employed), address, and ZIP code. BAA for Privacy Act and Paperwork Reduction Act Notice, see separate instructions.FIFAO105L 11/14/07Form 1041NR (2007)

  2. Form 1041NR (2007) Page 2 Creation of the Trust (See Instructions) Yes No a) Created by and funded by direct or indirect transfers of property by a US person(s)?………………………………… ___ ___ Trust has one or more US beneficiaries?……………………………………………………………………………….. ___ ___ Were any trust assets transferred into the trust by a non-US person?…………………………………………………. ___ ___ Has a US beneficiary made a gratuitous transfer of property to a non-US person?……………………………………. ___ ___ Were assets transferred to the trust by a US person(s) in exchange for consideration of the property transferred? …. ___ ___ Has a foreign grantor created and funded this trust? (Referred to as a “foreign grantor foreign trust) .. …. ___ ___ At any time has the trust become a “Foreign Non-Grantor Trust” because it does not meet the “Control Test” or “Court Test” for US tax purposes? ……………………………………………………………………………………. ___ ___ Was the trust created by the death of the grantor of a foreign grantor trust? …………………………………………. ___ ___ b) c) d) e) f) g) h) (See Instructions) Yes No Classification of the Trust a) Applicable to IRC Sections 674 to 677? …………………………………………………………………………………___ ___ b) Applicable to IRC Section 672(f)? (A foreign grantor created the trust and funded it; however, for income tax ___ ___ purposes, a US person is responsible for reporting the trust income unless Section 672(f)(2) applies.)……………….. c) Applicable to IRC Section 679? ………………………………………………………………………………………… ___ ___ (See Instructions) Yes No Information Concerning the Trustee a) Is the trustee a US citizen? ……………………………………………………………………………………………..…___ ___ b) Does the trustee have “control” by making “substantial” decisions without veto powers held by another party?……… ___ ___ Attach a copy of the trust instrument or will (of the settlor or grantor) ………………………………………………… ___ ___ 1) Does either document provide for possible foreign court jurisdiction applicable in IRS Reg 301.7701-7(c)(4)(ii)?.. ___ ___ Does the trustee have sole individual trustee or co-trustee powers? Indicate co-trustee, if applicable………………. ___ ___ If the trust has a co-trustee, is the co-trustee a US citizen or US income tax resident during the current year?..……… ___ ___ c) Is the trustee a US citizen or US income tax resident during the current year? …………………………………………. ___ ___ Indicate the tax jurisdiction of the trust’s administration: ________________________ Has it changed?....……..……. ___ ____ d) e) f) g) Charitable Deduction. Do not complete for a simple trust or a pooled income fund. Schedule A 1 Amounts paid or permanently set aside for charitable purposes from gross income. (See Instructions) ….. Tax-exempt income allocable to charitable contributions. (See Instructions)……………………………… Subtract Line 2 from Line 1 ………………………………………………………………………………… Capital gains for the tax year allocated to corpus & paid or permanently set aside for charitable purposes.. Add Lines 3 and 4……………………………………………………………………………………………. Section 1202 exclusion allocable to capital gains paid or permanently set aside for charitable purposes….. 1 2 2 3 3 45 4 5 6 6 (See Instructions) 7 7 Charitable Deduction. Subtract Line 6 from Line 5. Enter here and on Page 1, Line 14………………….. Income Distribution Deduction Schedule B 1 Adjusted total income. (See Instructions) …………………………………………………………………. Adjusted tax-exempt interest and other tax-exempt income….…………………………………………….. Total net gain from Schedule D (Form 1041NR), Line 15, Column 1 (See Instructions) …………………… Enter amount from Schedule A, Line 4 (minus any allocable Section 1202 exclusion) ……………………. Capital gains for the tax year included in Schedule A, Line 1 (See Instructions) ………………………….. Enter any gain from Page 1, Line 4, as a negative number. If Page 1, Line 4, is a loss, enter the loss as positive number. Distributable net income (DNI). Combine Lines 1 through 6. If zero or less, enter 0 ……….……………………… If a complex trust, enter accounting income for the tax year as determined under the governing instrument and applicable local law ……………………………………….. 1 2 2 3 3 4 4 5 5 6 6 7 7 8 8 9 9 Income required to be distributed currently…………………………………………………………………… 10 Other amounts paid credited, or otherwise required to be distributed………………………………………… 10 11 11 Total distributions. Add Lines 9 and 10. If greater than Line 8, see instructions….. 12 12 Enter the amount of tax-exempt income included on Line 11………………………………………………… 13 Tentative income distribution deduction. Subtract Line 12 from Line 11……………………………………. 13 14 Tentative income distribution deduction. Subtract Line 1 from Line 7. If zero or less, enter 0 14 15 Income distribution deduction. Enter the smaller of Line 13 or Line 14 here and on Page 1, Line 19……. 15 11/14/07Form 1041NR (2007)

  3. Form 1041NR (2007) Page 3 (See Instructions) Yes No Other Information (See Instructions) 1 Did the estate or trust receive tax-exempt income? If yes, attach a computation of the allocation of expenses……. . ► Enter the amount of tax-exempt interest income and exempt-interest dividends… Did the estate or trust claim the benefits of a US income tax treaty with a foreign country 2 . See Page ___ for information…. Type/amount of effectively connected income exempt from US tax: ________________________ a) Country: ________________ b) Applicable Tax Treaty Article # ________________ Description________________________________________________ Type and amount of income not effectively connected that is exempt from or subject to a reduced rate of tax. c) Country: __________________ Type/Amount: _____________________________________ Article #: _______________ Description: __________________________________________________________________________________________ d) At d) Attach d) Attach Form 8833 for disclosure of a Treaty-Based Return Position. 3 Did the estate or trust receive all or any part of the earnings (salary, wages, & other compensation) of any individual by reason of a contract assignment or similar arrangement?............................................................................................. At any time during the calendar year 2007, did the estate or trust have an interest in or a signature or other authority 4 over a bank, securities, or other financial account in a foreign country? See the instructions for exceptions and filing ► If yes, enter the name of the foreign country. requirements for Form TD F 90-22.1. During the tax year, did the estate or trust receive a distribution from, or was it the grantor of, or transferor to, a 5 foreign trust? If yes, the estate or trust may have to file Form 3520 or 3520-A. See instructions…………………….. 6 Did the estate or trust file a US income tax return for any year before 2007? If yes, complete the following: Years: __________________ Form Numbers: _______________ IRS Service Center: _____________________ Did the estate or trust receive, or pay, any qualified residence interest on seller-provided financing? 7 If yes, see instructions for required attachment………………………………………………………………………… 8 If this is an estate or a complex trust making Section 663(b) election, check here. (See Instructions)………..... ► To make a Section 643(e)(3) election, attach Schedule D (Form 1041NR), and check here. (See Instructions) ► 9   If the decedent’s estate has been open for more than 2 years, attach an explanation for the delay in closing the ………. . …………………………………………………………………………………………………………..► 10 estate & check here……….. 11 Are any present or future trust beneficiaries skip persons? See Instructions………………………………………….. 12 Did the trustee make an “indirect” distribution from a Foreign Trust through an intervening trust or nominee……… Schedule C Computation of Tax 1 1. Taxable Income, Line 23, Page 1………………………………………………….…………………………… 2 Tax (See Page ___ of Instructions) 2a a) Tax on taxable income……………………………………………………………………………………… b) Tax on lump sum-distributions. Attach Form 4972..................................................................................... c) Alternative minimum tax (from Schedule K, Line 56)……………………………………………………... d) Tax on income not effectively connected with a US trade or business from Page 6, Line 14……………… e) Total. Add Lines 2a through 2d…………………………………………………………………………… 2b 2c 2d 2e a) 3a 3 a) Foreign Tax Credit. Attach Form 1116…………………………………………………………………… b) Other nonbusiness credits. Attach Schedule…………………………………………………………… c) General business credit. Enter here and check/spcify which forms are attached…………………….. 3b 3c \ \ \ \ \ \ \ \ \ \ \ \ \ \ Form ___ Form ___ Form 3800 Form ___ 3d d) Credit for prior year minimum tax. Attach Form 8801………………………………………………….. 4 Total credits. Add Lines 3a through 3d………………………………………………………………………… Subtract Line 4 from Line 2e. If zero or less, enter 0…………………………………………………………. Recapture taxes. Check if from: 4 5 5 6 Form 8611………………………………………… Form 4255 6 7 7 Household employment taxes. Attached Schedule H (Form 1040)………………………………………….. 8 8 Total. Add Lines 5 through 7. Enter here and on Page 1 Line 24……………………………………………. 11/14/07Form 1041NR (2007) 6/28/07Form 1041NR (2007)

  4. Form 1041NR (2007) Page 4 Foreign Exchange Transactions (See Instructions) Schedule D 1 Transactions for Year 2007 Involving Foreign Exchange. Amount a) Foreign Currency to US Dollars Foreign US Currency Dollars Date Country/Currency Identification Exchange Rate Total: b) Net Gain or <Loss> in Currency Exchange Date Country/Currency Identification Exchange Rate Amount Total: c) US Dollars to Foreign Currency Date Country/Currency Identification Exchange Rate Amount Total: d) Net Gain or <Loss> in Currency Exchange………………………………………………………. e) Total Net Gain or <Loss> for 2007 (US Dollars) (Report on Line 8, Page 1)…………………….. 11/14/07Form 1041NR (2007)

  5. Form 1041NR (2007) Page 5 Identification of Distributions to Income Beneficiaries (See Instructions) Schedule E Amount US Foreign Currency Dollars As required by the trust instrument: 1. a) Distribution of Net Income for Year 2007 paid by cash. (If more than three, attach a separate schedule.)…… (1) Date of Distribution………►__________________ Paid To (2) Date of Distribution………► _________________ Paid To 1. (3) Date of Distribution………►__________________ Paid To b) Distribution of Net Income for Year 2007 (Non-Cash Distributions). Attach separate schedule if more than one. (1) Date of Distribution………► _________________ Paid To............................................................ Fair Market Value of Distribution…………………………………………………………………. (2) i) Tax basis of asset distributed……………………………………………………………………… (3) Value in excess of basis, if any. (Report on Schedule D, Capital Gains/Losses)…………………… (4) Net gain, if any (before currency exchange fluctuations)……………………………………………. (5) Lesser of b)(2) or b)(2)(i)…………………………………………………………………………….. c) Total Distributions of Net Income Paid or Credited to Beneficiaries (Current Year) (1) Conversion to US dollars (Report on Line 9, Schedule B, Page 2)………………………………….. (2) US withholding taxes allocated to beneficiaries. (See Form 1041NR-T, attached.)……………… Estimated tax payments allocated to beneficiaries. (See Form 1041NR-T, attached.)……………… (3) (If more than three, attach a separate schedule.)…………….. Other cash distributions to beneficiaries. d) (1) Date of Distribution………►__________________ Paid To (2) Date of Distribution………► _________________ ___________________________ Paid To (3)Date of Distribution………►__________________ Paid To _____________________________ Subtotal: e) Non-Cash Distributions for 2007 other than for current year income. More than one, attach a separate schedule.)………………………. (1) Date of Distribution… …►__________________. .Paid To___________________________ Fair Market Value of Distribution……………………………………………………………………. (2) i) Tax basis of asset distributed……………………………………………………………………… (3) Value in excess of basis. (Report of Schedule D, Capital Gains/Losses.)…………………………… Net gain, if any (before currency exchange of fluctuation)…………………………………………… (4) Subtotal: f) Total of Lines (d) and (e)………………………………………………………………………………….. (1) Conversion to US Dollars……………………………………………………………………………. (2) Line c)(2) plus Line c)(3), plus Line f)(1). (Report on Line 10, Schedule B, Page 2)……………… g) Portion of Line f)(1) treated as an accumulation distribution of a prior year(s). (Report on Schedule J, Accumulation Distribution for Certain Complex Foreign Trusts.)………………. Notes: Transfers out of a trust that are considered a loan or a gift to the beneficiary(s) should be reported above on one of the lines, unless an exception applies. (See Instructions) (See discussion of “qualified obligation” in Form 3520 instructions.) Indicate on Worksheet #3 the qualifying residence and citizenship of each beneficiary for the current year. Form 1041NR (2007) 11/14/07

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