Rental Property In a Family Trust Name

[Independent Mike]

We own a rental property in the trust name.  Do we need to request an EIN for the trust to properly file income or loss in the 2019 tax submission?

[Anonymous]

if the property is owned by the Family Trust, you need an EIN number and also need to file a trust tax return.   Is there really a trust document.    some states have in their trust laws a provision that makes depreciation a charge to corpus as opposed to income.  in those cases the trust must provide that depreciation can be distributed to trust beneficiaries.  Otherwise, cash income and expenses get distributed to beneficiaries but the depreciation stays with the trust and thus can't be used by beneficiaries to offset income.  

[Carl]

We own a rental property in the trust name.

Understand that if the property is deeded to the trust, then "we" don't own it. The trust does. All rental income is paid to the trust, and all rental expenses are paid by the trust. The trust is required to report all rental income/expenses on SCH E as a part of the 1041 trust return. the trust *must* have an EIN. I don't see how you can say you have a trust, if you don't already have an EIN for that trust. No bank would allow you to open an account for the trust, without an EIN.

Depending on the type of trust (there's literally hundreds of possibilities here) once the trust has completed the 1041 trust tax return and issued all K-1's to the beneficiary recipient's of that trust (if any) the recipients of the K-1 will "require" that K-1 before they can even start their personal 1040 tax return.

To complete a 1041 Estates & Trust return you need TurboTax Business. (Different from Home & Business). TurboTax Business is not available as an online product, and is not available for MACs. It's for the windows operating system *ONLY*.

You can purchase and download the CD installation file for TurboTax Business at https://turbotax.intuit.com/small-business-taxes/

[tagteam]

Who are the parties to the trust (i.e., grantor(s), trustee(s), beneficiary(ies)? Is the trust revocable?

This does not sound like a grantor type trust but if it is, the trust does not need an EIN.

[Dahunn2000]

I do not agree many of  the previous posts.  The answer is "depends".  When folks create a grantor type trust (known as a living trust) the trust does NOT file a tax return.  When the original grantors (parents) pass away, the trust then becomes a tax paying entity and files a trust return.  

This article explains this in greater detail.

https://www.fool.com/knowledge-center/taxation-of-family-trusts.aspx

Debby H, CPA 

[Carl]

I do not agree many of the previous posts

This is why "in general" I try not to be to specific to questions concerning a trust.... if I respond to such a post at all. There are many different types of trust and just as many ways each type can be set up. Add to that the differing trust laws in each state, an this public forum is the absolute worst place to be seeking help or advice concerning a trust. Questions should be addressed to either the administrator of the trust, or the legal entity that was directly involved in setting it up.

When it comes to a trust,you need answers, not guesses that are very likely based on incorrect assumptions.

[tagteam]

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@Dahunn2000 wrote:

When folks create a grantor type trust (known as a living trust) the trust does NOT file a tax return. 

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Grantors typically do not file an income tax return (Form 1041) for grantor trusts, but they CAN opt to do so, depending upon how they choose to report.

See https://www.irs.gov/instructions/i1041#idm140630131852672

Obviously, the filing differs from a nongrantor trust (no K-1s are issued), but a 1041 is still filed.

[jcui_mxie]

I have an irreversible trust. Why one of the property losses can not offset another property’s gain?

[tagteam]

Passive losses can be used to offset passive gains while capital losses can be used to offset capital gains, in general.