newly irrevocable trust, status & short year?

[fdragan]

Hello,

My recently deceased father had a revocable trust that became irrevocable when he died.  I am both the sole trustee and the sole beneficiary.  He didn't have enough money to really warrant a trust, but somebody sold him a package deal back in 2004.  The new irrevocable trust had about $800 in dividends & interest in 2024, to give you some idea.  I'd like to do it myself instead of consulting a tax professional, at least for 2024, since the stakes are really very low here.

First question: I'm not quite clear on if it's the same old trust with new status & trustee, or an entirely new entity, since now it has it's own EIN, where it used to operate under my father's SSN.  So is the date the trust created still the one in 2004, or when my father passed in 2024?

Second question: The "tax year" in TurboTax business would just be "short year", correct?  From the month of my father's passing?  Dad's tax year was always calendar year.

Pretty basic questions.  Thanks for your help!

[DianeW777]

Yes, you would continue with the same trust and you can mark Form 1041 as final this year. 

• After the grantor of an irrevocable trust dies, the trust continues to exist until the successor trustee distributes all the assets (which is you in this case).

It depends. It would make sense for it to be a short tax year if you are considering it's ending on your father's death in 2024. Be sure to mark it final.

[M-MTax · Accepted solution]

I am sorry for your loss.

While the trust was still revocable (your father was living and reporting it under his SSN), it was a grantor trust and not an entity separate and apart from your father (i.e., he was the "owner" of the assets in the trust).

When your father passed, the trust became a separate entity with its own tax ID number (EIN) and would have been required to file a 1041 if it had any taxable income for the tax year (or gross income of $600 or more).

The beginning date of this irrevocable trust with its own EIN would be the date of your father's passing.

The final return would be due by the 15th day of the 4th month following the close of the tax year, the close of the tax year being the date the trust was terminated, which could very well be a short year.

See https://www.irs.gov/instructions/i1041#en_US_2024_publink1000285977