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Old 02-09-2014, 02:25 PM
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Form 1041 for Estate/Trust - Combining by filing Form 8855

Instructions for IRS Form 1041 for Estate & Trust returns indicate Section 645 of the IRS Code provides that the tax return(s) for an estate that includes a revocable living trust (grantor trust) can be combined such that a single return (Form 1041) satisfies all reporting requirements. To elect to use that provision one must file a Form 8855 with the Form 1041.....and having done so, the election is irrevocable.

Such an election seems to make sense when all of the assets of the deceased are/were in a revocable living trust such that the estate and the assets of the trust are essentially the same.

Question: Is there any reason (pitfall to avoid) why one should NOT elect to file a Form 8855? And if one does not do so by filing a Form 8855, are two returns required (one for the estate, one for the trust)? Presuming that applicable taxes are only owed once, if two forms were submitted covering the same assets/taxes, one would be redundant.



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