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Estate and Trust with pour-over will.

marlton — Fri, 05 Mar 2021 15:03:07 GMT

When a pour-over will requires transfer of assets to a trust, is an Estate 1041 income tax return required or is all income considered Trust income and therefore only a Trust 1041 return is required?

Re: Estate and Trust with pour-over will.

Anonymous_ — Fri, 05 Mar 2021 15:13:41 GMT

Note that an election can be made under Section 645 to treat a qualified revocable trust as part of the estate at the outset.

Further, an estate is not required to file a 1041 unless it has gross income of $600 or more for its tax year (which might be unusual for a pour-over will).

You might consider seeking professional tax guidance and legal counsel.

Re: Estate and Trust with pour-over will.

marlton — Sat, 06 Mar 2021 17:51:24 GMT

Thank you. I am aware of the 645 election option but unfortunately the 8855 form to make the election had to be filed by 4/2020 even though the 1041 filing was not required. For 2020 I have gross estate income in excess of $600. I have losses in the trust that can be used to offset the estate income if this income can be poured-over to the trust for tax purposes.

Are you saying that the pour-over will does not eliminate the need to file the estate 1041?

Re: Estate and Trust with pour-over will.

Anonymous_ — Sat, 06 Mar 2021 18:11:34 GMT

Yes, it should. Are you saying the estate had income?

All remaining assets in the estate should immediately be transferred to trust at the time of death.

Re: Estate and Trust with pour-over will.

marlton — Sat, 06 Mar 2021 19:45:14 GMT

Yes, I did mention previously that for 2020 there is estate income in excess of $600.

I agree that the pour-over will should immediately transfer assets and control to the trust and trustee. It's the "should immediately" that concerned me after going through the probate process. Probate seems to ignore the "immediate" clause so I began to question the taxing.

Another concern is that the 8855 form clearly links the estate name, SS number, and Date of Death to the Trust name, EIN, and trustee. That link won't exist by simply filing estate taxes as the Trust. Estate 1099 forms name the recipient SS number. Trust 1099 forms name the Trust EIN.

Are there any other steps required to make this link? Or is it not an issue.

Thank you for your help.

Re: Estate and Trust with pour-over will.

Anonymous_ — Sat, 06 Mar 2021 19:51:01 GMT

With a 645 election, you file a return for the estate, obviously; the QRT is treated as part of the estate.