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Old 04-02-2017, 11:24 AM
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1041 filing requirement and TIN

Last year, 2016, my relative with a revocable trusts passed away and the revocable trust became irrevocable. I obtained a TIN. I was the only person named in the trust.

Before the end of 2016 I distributed substantially all trust assets to me except a small balance in a checking account. Before that time the trust earned about $300 in dividend income and $150 in qualified dividend income and less than $1 in interest. Total gross less than $500, which is seemingly less than the $600 filing requirement. The trust also had a short-term capital loss in investments, just slightly greater than the gross income, so trust net was a very small negative amount.

2017 income will be less than fifty cents and I will dispose of the checking account (last asset) this year.

Can I not file a (first / first+last) 1041 for 2016?

Can/should I file a first+last 1041 next year (2017 taxes) with all zeros? If not how do I "dispose" of the new TIN?



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Old 04-02-2017, 08:21 PM
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Last year, 2016, my relative with a revocable trusts passed away and the revocable trust became irrevocable. I obtained a TIN. I was the only person named in the trust.==> If an EIN has been obtained for a trust, it is required to file a 1041 return and provide K-1s to each beneficiary showing the income distributed to them that year. The beneficiaries then report the income shown on their K-1s as income on their 1040. Upon the death of the grantor, a revocable trust automatically becomes irrevocable You need to obtain an EIN for the trust, the SS# is inappropriate and no bank or other institution will allow you to set it up that way. The irrev. trust is a new entity and it must have its own TIN. It also must file a Federal Income Tax Return annually ;possibly a State Return wil be needed as well.
If you would rather use your SSN, then you cannot use an irrevocable trust


Before the end of 2016 I distributed substantially all trust assets to me except a small balance in a checking account. Before that time the trust earned about $300 in dividend income and $150 in qualified dividend income and less than $1 in interest. Total gross less than $500, which is seemingly less than the $600 filing requirement.====>correct;a trust can generate income that must be reported on Form 104. However, if trust beneficiary is entitled to receive the income, the beneficiary must pay the income tax rather than the trust . At the end of the year, all income distributions made to the beneficiary must be reported on a Sch K-1of 1041.


The trust also had a short-term capital loss in investments, just slightly greater than the gross income, so trust net was a very small negative amount.=====> The beneficiaries each get their proportional share of the capital losses distributed to them on their FINAL K-1. The deductions go on Line 11 with a Code B or C. B is short term loss, C is long term loss. In addition, since the trust has more expenses than income in its final year, you can "distribute" an "Excess Deductions on Termination" as a code A on Line 11. Only a final return can distribute capital losses out.



2017 income will be less than fifty cents and I will dispose of the checking account (last asset) this year.Can I not file a (first / first+last) 1041 for 2016?====> you cannot show the losses until the final returnyou need to file final 1041 for the irrevocable trust;

Can/should I file a first+last 1041 next year (2017 taxes) with all zeros? If not how do I "dispose" of the new TIN?=>.as mentioned above;



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Old 04-15-2017, 05:57 PM
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Join Date: Apr 2017
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Quote:
Originally Posted by Wnhough View Post
Last year, 2016, my relative with a revocable trusts passed away and the revocable trust became irrevocable. I obtained a TIN. I was the only person named in the trust.==> If an EIN has been obtained for a trust, it is required to file a 1041 return and provide K-1s to each beneficiary showing the income distributed to them that year. The beneficiaries then report the income shown on their K-1s as income on their 1040. Upon the death of the grantor, a revocable trust automatically becomes irrevocable You need to obtain an EIN for the trust, the SS# is inappropriate and no bank or other institution will allow you to set it up that way. The irrev. trust is a new entity and it must have its own TIN. It also must file a Federal Income Tax Return annually ;possibly a State Return wil be needed as well.
If you would rather use your SSN, then you cannot use an irrevocable trust


Before the end of 2016 I distributed substantially all trust assets to me except a small balance in a checking account. Before that time the trust earned about $300 in dividend income and $150 in qualified dividend income and less than $1 in interest. Total gross less than $500, which is seemingly less than the $600 filing requirement.====>correct;a trust can generate income that must be reported on Form 104. However, if trust beneficiary is entitled to receive the income, the beneficiary must pay the income tax rather than the trust . At the end of the year, all income distributions made to the beneficiary must be reported on a Sch K-1of 1041.


The trust also had a short-term capital loss in investments, just slightly greater than the gross income, so trust net was a very small negative amount.=====> The beneficiaries each get their proportional share of the capital losses distributed to them on their FINAL K-1. The deductions go on Line 11 with a Code B or C. B is short term loss, C is long term loss. In addition, since the trust has more expenses than income in its final year, you can "distribute" an "Excess Deductions on Termination" as a code A on Line 11. Only a final return can distribute capital losses out.



2017 income will be less than fifty cents and I will dispose of the checking account (last asset) this year.Can I not file a (first / first+last) 1041 for 2016?====> you cannot show the losses until the final returnyou need to file final 1041 for the irrevocable trust;

Can/should I file a first+last 1041 next year (2017 taxes) with all zeros? If not how do I "dispose" of the new TIN?=>.as mentioned above;
Thanks for this information; hopefully I've now filed the 1041 correctly.



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