Coming soon: AICPA practice guide for fiduciary (trust) accounting.

• Author: McNamara, Lawrence H., Jr.

The AICPA Trust Accounting Income (TAI) Task Force was established to provide guidance in performing trust and estate accountings and related tax services. The AICPA Tax Division's Trust, Estate and Gift Tax Technical Resource Panel (chaired by Ruby Sawyers in 2004-2005, and Steven Thorne in 2005-2006) appointed and provided direction and oversight to the Task Force. The tools and best practices for preparation of a fiduciary (or trust) accounting are included in a Practice Guide (Guide) to help CPAs provide better fiduciary accounting services.

The Guide was developed specifically for CPAs, but will be a useful tool for anyone with fiduciary accounting responsibilities. It will provide members with a better understanding of this continually evolving and very technical subject.

Overview

Because the basis of fiduciary accounting is promulgated by statute (i.e., the Uniform Principal and Income Act (UPIA)), which some states have adopted or are considering adopting in whole or in port, one must review several legal sources to understand the principles of fiduciary accounting. As described in the Guide, the Uniform Trust Code (2000), as amended in 2001 and 2003, was drafted by the National Conference of Commissioners on Uniform State Laws (NCCUSL) to provide the states with a comprehensive model for codifying their own Principal and Income Act. Because it would not he practical for the Guide to lake into account each state's individual principal and income statute, it is written based on the NCCUL's UPIA.

In addition, the Guide will emphasize the importance of understanding these legal aspects, as well as the terms provided by the governing instrument (and amendments, if any), before a fiduciary accounting can be prepared.

There are "statutory" differences between "fiduciary accounting income" (FAI) and Federal and state taxable income. The Guide will enable a practitioner...