living trust and taxes

hellothere7 · ‎October 11, 2023

My husband and i just created a living trust, we do own couple of rental properties that we moved into the trust. for tax purposes how are you suppose to file the rental income .

Also, I own 50% of an LLC , i also moved my interest in the LLC to the trust.

When filling the LLC taxes, do i need too change anything , i usually a receive K1, will it stay the same .

thank you

Anonymous_ · ‎October 11, 2023

Living trusts (aka revocable living trusts or RLTs - grantor trusts) are disregarded for federal income tax purposes.

All of the income, gain, deductions, credits are treated as belonging to the owner(s) of the trust assets.

There are optional methods to report items of income, gain, etc., including filing a 1041 with a GIS (grantor information statement) or simply reporting on the owner(s) individual income tax return (1040); filing a 1041 and issuing a K-1 is not one of the acceptable methods for grantor trusts.

See https://www.irs.gov/instructions/i1041#en_US_2022_publink1000286018

View solution in original post

Anonymous_ · ‎October 11, 2023

Living trusts (aka revocable living trusts or RLTs - grantor trusts) are disregarded for federal income tax purposes.

All of the income, gain, deductions, credits are treated as belonging to the owner(s) of the trust assets.

There are optional methods to report items of income, gain, etc., including filing a 1041 with a GIS (grantor information statement) or simply reporting on the owner(s) individual income tax return (1040); filing a 1041 and issuing a K-1 is not one of the acceptable methods for grantor trusts.

See https://www.irs.gov/instructions/i1041#en_US_2022_publink1000286018