The original proposed regulations provided that the net investment income tax applied to regular trusts, which currently include pooled income funds, cemetery perpetual care funds, qualified funeral trusts
, and Alaska native settlement trusts.
Income Tax Return for Qualified Funeral Trusts
, will receive six-month, not five-month, extensions.
 Qualified funeral trusts may file Form 1041-QFT only if they have applied for and received QFT status.
 The number of qualified funeral trusts included on a single return is entered on line 4 of Part I of Form 1041-QFT.
Distribution of Fiduciary Income Tax Returns, by Entity Type, Filing Year 2004 Grantor trust 35.5% Complex trust 33.1% Simple trust 20.3% Decendent estate 10.6% Other entities (1) 0.6% (1) Includes bankruptcy estates, split-interest trusts, qualified funeral trusts, qualified disability trusts, and pooled income funds.
A qualified funeral trust is a method of securing payment for funeral and burial services.
301.770-14( b), certain state law trusts, pooled income funds, cemetery perpetual care funds, qualified funeral trusts
, etc., as well as tax-exempt trusts, excluding even unrelated business income of those trusts) (Prop.
685(c) (prior to repeal), aggregate contributions to a qualified funeral trust could not exceed $7,000.
Before the limitation was repealed, a qualified funeral trust that had aggregate contributions in excess of $7,000 ceased to be a qualified funeral trust, and its income would be taxed as ordinary income of the grantor of the trust--at a lower individual income tax rate.