Schedule — Instruction 1041-N — Instructions for Form

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 8992, U.S. Shareholder Calculation of Global Intangible Low-Taxed Income (GILTI), to report the ANST’s GILTI.

Use Form 8995, Qualified Business Income Deduction Simplified Computation; and Form 8995-A, Qualified Business Income Deduction, to figure the qualified business income deduction.

Capital Asset

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.

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.

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

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)).
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.
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.
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.

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

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 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.

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

8. Add lines 5 and 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.

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.

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

8 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

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.

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.

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.

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.

Instructions for the Unrecaptured Section 1250 Gain Worksheet

Instructions for Form 1041-N (Rev. 12-2025) 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 for the current tax year) from installment sales of trade or business property held more than 1 year. See instructions . . . . . . . 4. 5. Enter the total of any amounts reported to the ANST on a Schedule K-1 from a partnership or an S corporation as “unrecaptured section 1250 gain” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. 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 the current tax year) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.

8. Enter the amount, if any, from Form 4797, line 8 (for 2025, or the comparable line for the current tax year) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8. 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 gain. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10. 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

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.

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