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jwidmermd
New Member

Do I need to file 1041 if the trust had dividend of $225 and expense of $650?

I am trustee of trust that had dividend income of $225 and expenses of $650. Is the dividend taxable income requiring filing or does the loss of $425 mean the trust has no taxable income (AGI) so a form does not need to be filed and K-1 for the loss does not need to be sent to trust beneficiaries who do not want to claim the loss? I am unsure if the IRS statement to if taxable income is any taxable income or AGI.

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1 Reply
JulieH1
New Member

Do I need to file 1041 if the trust had dividend of $225 and expense of $650?

It depends on the kind of trust and what the document says.  If the document does not require annual filings, then with the numbers above, you would not have a taxable income (your expenses make it a negative) and you did not make $600 in income, so you do not need to file.

A trust is a legal entity formed under state law, creating a relationship where one person holds title to property subject to some benefit to another person(s), referred to as a beneficiary. Trusts can be created for a living person or come into existence at a person's death.

Many trusts require the filing of a Tax Return for Estates and Trusts (Form 1041), however some do not. Here are some examples:

Decedent’s Estate
In the case of a death, the executor must file a Tax Return for Estates and Trusts (Form 1041) for a domestic estate that has:

  • Gross income of $600 or more for the tax year, or
  • A beneficiary who is a non-resident alien

Domestic Trust
You must file Form 1041 for a domestic trust that has:

  • Any taxable income for the tax year,
  • Gross income of $600 or more (regardless of taxable income),
  • A beneficiary who is a non-resident alien

Revocable trusts (Grantor Trusts) are not required to file form 1041.

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