Concept Summary 20.1

Tax Treatment	Subchapter K (Partnerships,LLC)	Subchapter S (S Corporations)	Subchapter J (Trusts, Estates)
Taxing structure	Pure pass-through, only one level of federal income tax	Chiefly pass-through, usually one level of Federal income tax	Modified pass-through, Federal income tax falls on the recipient of entity accounting
Entity-level Federal income tax?	Never	Rarely	Yes, if the entity retains any net taxable income amounts
Form for reporting income and expense pass-through	Schedules K and K-1, Form 1065	Schedules K and K-1, Form 1120S	Schedules K and K-1, Form 1041

Subject to entity-level AMT?	No, but preferences and adjustments pass-through to owners	No,but preferences and adjustments pass through to owners.	Yes,if the entity retains any AMT-related accounting income amounts.
Controlling Documents	Partnership agreement, LLC charter	Corporate charter and bylaws	Trust document or will, state fiduciary or probate law.

How is the notion of income taxation of estates and trusts different from the estate and gift tax? Are they the same type of tax? If not, how are they different? ,

After reviewing Concept Summary 20.1 in your textbook, pick one of the principles of fiduciary taxation and explain it using an example. See chart above for the concept summary 20.1