Thanks for the previous replies to my question. I am currently preparing my son's 1041 and have a follow-up question.
As I mentioned previously, because this is a Grantor-type trust (a first-party Special Needs Trust), the income is taxable to the grantor under sections 671-678 of the IRC. Therefore, I actually file an informational 1041 along with a Grantor Trust Information Letter, instead of a full-blown 1041. I have prepared a Schedule H and plan to include it with this informational 1041. Per the IRS 1041 instructions for Grantor Type Trusts, "If the entire trust is a grantor trust, fill in only the entity information of Form 1041. Don't show any dollar amounts on the form itself; show dollar amounts only on an attachment to the form." Consequently, my understanding is that I should not enter the Household employment tax amount on Schedule G, Part I, line 7 and carry it forward to line 24 "Total Tax" on form 1041. I should leave all of that blank and simply enclose the Schedule H, along with a payment voucher and payment/check for the taxes with the informational return.
Is this correct?
Thank you.
