Can the 1041 be filed jointly instead of a joint 1040?

[cjkeeler1]

My husband manages a family property trust and we accrue expenses for the trust administration from our money as a couple. Can we file a 1041together instead of a 1040 joint return? 

[JasonH24]

No. Since a trust is a legal entity filing the Form 1041 is separate from filing your Form 1040. Any income produced by the property would be reported on the 1041 Form K-1 which would be issued to the beneficiaries to report on their Form 1040.

[cjkeeler1]

So given the answer, how exactly do we deduct the expenses associated with administering over the trust? The 1040 puts a capon deductions only allowing of the AGI, whereas the 1041 has no cap on those deductions?

[JasonH24]

What type of property is it? Rental property? Vacation home? The ability to take deductions depends on what type of property it is. Any property can be held in a trust.

[cjkeeler1]

The property is a 4 unit apartment complex (rental property upkeep is the expense we want to deduct)

[JasonH24]

All income and expenses from a rental property should be reported the IRS. Most of the time that is on Form 1040, Schedule E. Deductions are not limited but because rental income is considered passive losses are limited (not lost however).

If this is something that has been ongoing you should continue to report it as it was before. If it is new it needs to be set up properly. Either way, the best way to handle your situation is to sit down with someone face to face to discuss it.