Revocable trusts (Grantor Trusts) are not required to file a tax return or form 1041.
When grantor trust status applies, either the grantor or a beneficiary is treated as the owner of the activity inside the trust for income tax purposes. In that case, the deemed owner must include the activity of the trust on his or her personal tax return (see Regs. Sec. 1.671-2(a)).
It is optional if you want to file a 1041 to list only the trust’s name, address, and tax identification number (TIN) (see Regs. Sec. 1.671-4(a)). The assets owned by the trust are normally titled so that the earnings are initially reported by the payor (i.e., the brokerage firm, partnership, or, in many cases, an S corporation, etc.) as being taxable to the trust. However, by filing the Form 1041, the trustee is in effect letting the IRS know that the items of income or deductions are instead reportable by the “deemed owner.” The activity that is reportable by the deemed owner is summarized on a separate statement (a grantor tax information letter), which is attached to the otherwise blank Form 1041 when it is submitted to the IRS.
If you decide you want to file a 1041, you can use TurboTax Business to do the 1041 form.
