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1042-S

Setting Options

Several options on the Options and Overrides page apply to Form 1042-S and distributions to recipients. These options are in the
Compute-Federal
 and
Beneficiary
 categories. They can be set at the PAN or SuperBank level and overridden at the account level.
You should set options the first year you use ONESOURCE Trust Tax to process Form 1042-S, then review and update the options as necessary each subsequent year.

Setting Options in the Compute-Federal Category

To set options in the
Compute-Federal
 category:
  1. Select
    SETUP
    ,
    Options&Overrides
     then
    PAN Level
     or
    SuperBank Level
    .
  2. Apply a filter to limit the options displayed to only those that apply to Form 1042-S. To apply a filter, select the filter bar below the heading of the
    Description
     column, enter
    *1042-S
     as the filter, press ENTER or select Filter then select
    Apply All Filters
    . The Options and Overrides page now shows only those options that apply to Form 1042-S.
  3. Set the following options in the
    Compute-Federal
     category:
    • Reallocate expenses to income with highest withholding rate on Form 1042-S
      -Identifies how expenses reported on Schedule K-1 or Form 1042-S are allocated. Expenses can be allocated to the highest withholding rate first or proportionally against all classes of income.
    • Select
      Yes
       to allocate expenses to the highest withholding rate first. Select
      No
       to proportionally allocate expenses against all classes of income.
    • Report bank deposit interest paid to nonresident alien individuals on Form 1042-S even if reporting is not required based on country of residence
      -Identifies whether bank deposit interest paid to NRA recipients is reported on Form 1042-S.
    • Select
      Yes
       to report bank deposit interest regardless of whether reporting is required by the NRA recipient's resident country. Select
      No
       to report bank deposit interest only when reporting is required by the NRA recipient's resident country.
    • Include capital gains on Form 1042-S
      -Identifies whether capital gains distributed to NRA recipients are included on Form 1042-S.
    • Select
      Yes
       to include distributed capital gains on Form 1042-S. Select
      No
       to exclude distributed capital gains on Form 1042-S.
  5. Select
    Save
    .
  6. Clear the applied filter. Select filter for the
    Description
     column then select
    Clear This Filter
     or
    Clear All Filters
    .

Setting Options in the Beneficiary Category

The options in the
Beneficiary
 category apply to all beneficiaries, not just NRA recipients. To set the options in the
Beneficiary
 category:
  1. Select
    SETUP
    ,
    Options&Overrides
     then
    PAN Level
     or
    SuperBank Level
    .
  2. Set the following options in the
    Beneficiary
     category:
    • Beneficiary distribution computations-Simple and Complex $300 trusts
      -This option identifies how beneficiary distributions are calculated for simple and complex $300 trusts. The selections include:
      • Accumulate matched payments for each beneficiary; convert to a percentage of total amounts distributed
        -Transactions for a beneficiary are totaled. The total is then converted to a percentage for all beneficiary transactions for the account. This is the default.
      • Use percentage passed in beneficiary record of your trust accounting system
        -The percentage loaded from your trust accounting system is used. The default (
        Accumulate matched payment for each beneficiary; convert to a percentage of total amounts distributed
        ) is used if a percentage is not loaded from your trust accounting system.
      • Give each beneficiary an equal share of the total distributions
        -100% is divided by the number of beneficiaries in the account so that each beneficiary has an equal share.
    • Beneficiary distribution computations-Complex $100 trusts
      -This option identifies how beneficiary distributions are calculated for complex $100 trusts. The selections include:
      • Accumulate matched payments for each beneficiary; present as a dollar amount
        -Distribution transactions for each beneficiary are accumulated based on beneficiary distribution tax codes, and the amount distributed is reported as a dollar amount. Distribution transactions that are not matched to a valid beneficiary are included in the total, but not in the individual beneficiary total. This is the default.
      • Use percentage passed in beneficiary record of your trust accounting system
        -The percentage loaded from your trust accounting system is used. The default (
        Accumulate matched payment for each beneficiary; present as a dollar amount
        ) is used if a percentage is not loaded from your trust accounting system.
    • Beneficiary distribution computations-Estates
      -This option identifies how beneficiary distributions are calculated for estates. The selections include:
      • Accumulate matched payments for each beneficiary; present as a dollar amount
        -Distribution transactions for each beneficiary are accumulated based on beneficiary distribution tax codes, and the amount distributed is reported as a dollar amount. Distribution transactions that are not matched to a valid beneficiary are included in the total, but not in the individual beneficiary total. This is the default.
      • Use percentage passed in beneficiary record of your trust accounting system
        -The percentage loaded from your trust accounting system is used. The default (
        Accumulate matched payment for each beneficiary; present as a dollar amount
        ) is used if a percentage is not loaded from your trust accounting system.
    • Beneficiary distribution computations-Grantor trusts
      -This option identifies how beneficiary distributions are calculated for grantor trusts. The selections include:
      • Accumulate matched payments for each beneficiary; convert to a percentage of total amounts distributed
        -Transactions for a beneficiary are totaled. The total is then converted to a percentage for all beneficiary transactions for the account. This is the default.
      • Use percentage passed in beneficiary record of your trust accounting system
        -The percentage loaded from your trust accounting system is used. The default
        (Accumulate matched payment for each beneficiary; convert to a percentage of total amounts distributed
        ) is used if a percentage is not loaded from your trust accounting system.
      • Give each beneficiary an equal share of the total distributions
        -100% is divided by the number of beneficiaries in the account so that each beneficiary has an equal share.
    • Beneficiary distribution computations-Agency accounts
      -This option identifies how beneficiary distributions are calculated for agency accounts. The selections include:
      • Accumulate matched payments for each beneficiary; convert to a percentage of total amounts distributed
        -Transactions for a beneficiary are totaled. The total is then converted to a percentage for all beneficiary transactions for the account. This is the default.
      • Use percentage passed in beneficiary record of your trust accounting system
        -The percentage loaded from your trust accounting system is used. The default (
        Accumulate matched payment for each beneficiary; convert to a percentage of total amounts distributed
        ) is used if a percentage is not loaded from your trust accounting system.
      • Give each beneficiary an equal share of the total distributions
        -100% is divided by the number of beneficiaries in the account so that each beneficiary has an equal share.
  4. Select
    Save
    .

This article applies to:

  • PRODUCT: ONESOURCE Trust Tax