1041 Filing requirements I am the fiduciary, trustee, for my brothers living trust. He established the trust in September of 2013 and moved his home into the trust as its only asset. He passed away in February of this year. As the trustee, I placed the home on the market and sold it placing all the proceeds, less expenses, into the trust's bank account.
I have several questions.
1. The trust has two beneficiaries to whom I make regular monthly payments to. What method (tax form) do I use to inform them of their tax liability. I'm assuming 1041 K, but really do not know.
2. Do I report the sale of the home to the IRS under my brother's final tax return or do I report it on a 1041 as well? Is the sale considered income and therefore taxable?
3. Each of the two beneficiaries receives the same amount each month and the trust will have no appreciable income save for a small amount of interest. How do I report subsequent years?
I am well versed in my responsibilities as the fiduciary with one glaring exception and that is the tax aspects of my duties. The trust isn't very large and I don't want to squander any assets on unnecessary cost if I can do these things myself. Any assistance you can provide is greatly appreciated. |