U.S. · Tax forms
Form 1041 line 23, taxable income.
The subtraction, the minimum rule, and what to do if line 23 comes out negative.
Line 23 (“Taxable income”) is line 17 minus line 22. Line 17 is adjusted total income or (loss) and line 22 adds lines 18 through 21. It cannot be less than the larger of two amounts tied to inversion gain and REMIC excess inclusions, and a loss may be a net operating loss.
Look up a line 23 rule
Result
Line 23 rules, 2025 instructions
| Topic | Meaning | What the IRS says |
|---|---|---|
| Formula | Line 17 minus line 22 | Form wording: Subtract line 22 from line 17. If a loss, see instructions |
| Line 22 | Add lines 18 through 21 | Income distribution deduction, estate tax deduction, qualified business income deduction and exemption |
| Minimum taxable income | Floor on line 23 | Cannot be less than the larger of the inversion gain under section 7874 or the excess inclusions from Schedule Q (Form 1066), line 2c |
| Loss on line 23 | May be an NOL | If figured without the minimum rule it is a loss, the estate or trust may have a net operating loss |
| NOL computation | Exclude lines 13, 18, 21 | Do not include the deductions claimed on lines 13, 18 and 21 when figuring the NOL |
| NOL carryback | Generally not allowed | Generally carried forward only; the 2-year carryback applies only to the portion attributable to a farming loss |
| NOL forms | Form 172, Form 1045 | Figure the NOL on Form 172; use Form 1045 or an amended return for a refund from a carryback |
| Excess deductions on termination | Pass to beneficiaries | Final-year deductions (excluding the charitable deduction and exemption) in excess of gross income are allowed to the succeeding beneficiaries |
| Unused NOL on termination | Pass to beneficiaries | Allowed to beneficiaries succeeding to the property; see Schedule K-1 box 11, codes E and F |
What feeds line 17
Line 9 is total income. Lines 10 through 15b are the deductions, added on line 16, and line 17 is line 9 minus line 16, adjusted total income or (loss). The distribution deduction on line 18 comes from Schedule B, line 15.
What comes next
Line 24 is total tax from Schedule G, Part I, line 9. Line 23 itself is not the tax; the tax computation is on Schedule G.
When line 23 is a loss
The instructions say to look at NOL treatment: the loss is figured without the line 13 charitable deduction, line 18 distribution deduction and line 21 exemption. At termination, unused carryovers and excess deductions pass to the beneficiaries.
Worked example
Riverside Trust (made up) has adjusted total income of $58,000 on line 17, an income distribution deduction of $30,000 on line 18, no estate tax or QBI deduction, and a $100 exemption. Line 22 is $30,100 and line 23 is $58,000 − $30,100 = $27,900. Names and figures are made up.
More line pages in this set
Related lines: Form 1041 Line 21, Form 1041 Line 15a, Form 1041 Line 11.
Sources
- Instructions for Form 1041 and Schedules A, B, G, J, and K-1 (2025): the line-by-line instructions on this page. Page last reviewed or updated April 30, 2026. Read November 2, 2026.
- Form 1041 (2025), U.S. Income Tax Return for Estates and Trusts: the printed line wording and arithmetic on the form (Form 1041 (2025), created 10/28/25). Read November 2, 2026.
Tax year 2025 forms and instructions: Form 1041 (2025) and its 2025 instructions. Line numbers and labels were read from the IRS PDF and instructions on the date read and can change between tax years, so check them against the form for your year. Names in worked examples are made up.
Frequently asked questions
How is Form 1041 line 23 calculated?
Subtract line 22 from line 17. Line 17 is adjusted total income or (loss); line 22 is the sum of lines 18 through 21.
Can line 23 be negative?
If it is a loss before the minimum taxable income rule, the estate or trust may have a net operating loss. The instructions say not to include the deductions on lines 13, 18 and 21 when figuring the NOL.
What is the minimum taxable income rule?
Line 23 cannot be less than the larger of the inversion gain of the estate or trust under section 7874 or the sum of excess inclusions from Schedule Q (Form 1066), line 2c.
Can an NOL be carried back?
Generally no, an NOL can only be carried forward, except a 2-year carryback for the portion attributable to a farming loss.
What happens to leftover deductions when a trust ends?
Final-year deductions in excess of gross income (excluding the charitable deduction and exemption), and unused NOL carryovers, are allowed to the beneficiaries succeeding to the property.
Not tax advice
This page summarizes IRS instructions, mostly written for the people who prepare the form, and is not tax, legal or financial advice. A CPA or an enrolled agent can confirm what a line means for your return. Everything runs in your browser; nothing you enter is sent anywhere.