Reminder:

When a 965(h) election is made in the year of the triggering event, a TC 766 CRN 263 should be entered in the amount of 92% of the triggered liability along with the TC 971 AC 114 in the amount of the triggered liability. Additionally, there should be a TC 767 CRN 263 for each payment and/or credit applied towards the 965 tax liability.

The triggered liability amount must be transferred from Form 965-A, Part IV, where it is annually reported, to Part I, on one of lines 5 through 8 as follows: In column (a), the tax year in which the triggering event occurred is reported. Columns (b) through (e) are skipped and the triggered liability is reported in column (f) as a positive number. "Yes" is then entered in column (g) to indicate a 965(h) election is being made to pay the triggered liability in installments. The amount in Column (f) should be carried to Column (i) and the corresponding line in Part II, column (b), Paid for Year 1, should report the 1st installment payment. The taxpayer may also file a Form 965-E, Consent Agreement Under Section 965(i)(4)(D), when making a 965(h) election in the year of the triggering event.

In addition to reporting the triggered liability & subsequent 965(h) election on the Form 965-A, the taxpayer should report the triggered net 965 tax liability on the Form 1041, U.S. Income Tax Return for Estates and Trusts.