maslance
New Member

Change Trust from Revocable to Irrevocable

2018 Taxes filed for the Revocable trust and my mother.  On 1-1-2019 the trust was changed to an Irrevocable Trust.  Where in Turbo Tax do i make the change to notate it is now an Irrevocable Trust on trust tax return and mothers return?  For some reason this is hard for me to find.  Thanks - 

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@maslance wrote:

Where in Turbo Tax do i make the change to notate it is now an Irrevocable Trust on trust tax return and mothers return?


You do not notate the change on any income tax return.

 

Revocable trusts (aka living trusts) are grantor trusts and, as such, are considered disregarded entities for federal income tax purposes (although a Form 1041 can be filed if the trust has an EIN - but no K-1s are issued).

 

Irrevocable trusts can be grantor or nongrantor trusts. In the case of the latter, the trust needs an EIN (since it is a separate entity) and a Form 1041 is required to be filed if the trust has gross income of $600 or more or has any taxable income. 

 

Revocable trusts typically become irrevocable upon the death/disability of the grantor or via an amendment to the trust document.

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maslance
New Member

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Does it matter if the Trust has income and distributions or if only one or the other?  Thanks for the help.

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@maslance wrote:

Does it matter if the Trust has income and distributions or if only one or the other? 


In terms of filing a return, it does matter (i.e., if the income is below the threshold required for filing a 1041, then a 1041 does not need to be filed). 

 

However, neither income nor distributions change the nature  (or type) of the trust.

Anonymous
Not applicable

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what occured to change it to irrevocable,  is she no longer trustee? does she still have any conrol over the trust?

 

the reason I ask is that generally if she has some control over the trust assets, it's still a grantor trust.   if she had control over the trust while it was revocable, it'would be a grantor trust.  a 1041 is still filed but the income and expense reporting is differnt. 

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@Anonymous wrote:

what occured to change it to irrevocable....?


There are not dozens of answers to that question. In fact, there are basically three (as I mentioned in my earlier post); death, disability, amendment.