Irrevocable trust tax preparation.

[mikescully12216]

On Feb 4, 2016 my mother created an Irrevocable trust.  I am the sole Lifetime beneficiary.  Although she has since passed away Jan 19, 2017.  It is a Grantor Trust with her as the Settlor. There is an EIN for the trust. How do I prepare her 2016 tax return for the trust.  I purchased Turbotax for business to do the preparation but there is no provision to prepare the return, it seems it only prepares K1's.  How do I actually prepare a federal income tax return.  Isn't the trust a separate entity?

[RichardG · Accepted solution]

Please make sure you checked the box to indicate the trust was a grantor trust (see screenshot below).  As a grantor trust, all the trust's income for 2016 is taxable to the settlor of the trust, your mother.  TurboTax will generate Form 1041 and an information worksheet for reporting the trust's income on your mother's final tax return.  There should not be a Form K-1.  

[terrydavidbryant]

Follow on question:  How then does the grantor report the income from the trust if no K-1 is created?  Is it just as Ordinary Dividends, Interest Income, etc.?