topic Irrevocable Trust tax prep in Business & farm

Irrevocable Trust tax prep

shennes1 — Wed, 01 Apr 2020 01:16:18 GMT

My father had a Revocable Trust with my brother and sister and myself as beneficiaries. He passed away in January of 2019. The Estate consisted of one rental property and a limited Bond portfolio and some savings.

I am planning on filing an initial 1041 for the trust to report the rental income and portfolio Dividends etc..

question, if the trust with it's own EIN number files the 1041 is there any tax liability for the beneficiaries?

The only distribution from the estate in 2019 was Estate Corpus.

The Estate will be settled in 2020 and a final 1041 prepared next year.

Re: Irrevocable Trust tax prep

dodgers90210 — Wed, 01 Apr 2020 05:14:18 GMT

Rental income and dividends are going to go right through to the beneficiaries because of the distribution.

Re: Irrevocable Trust tax prep

Irene2805 — Wed, 01 Apr 2020 16:45:00 GMT

I'm sorry for your loss!

If the rental property and bond portfolio are part of the trust, then the rental income and any income from the portfolio belong to the trust. It's the trust then that distributes income to the beneficiaries. This income is then reported to the beneficiaries on a K-1, which they include in their individual returns.

For a Trust/Estate return (1041) you will need TurboTax Business. You can visit the following link to purchase the program: TurboTax Business.

TurboTax will take you through an interview to prepare the business return, similar to the personal (1040) products.

As part of preparing the 1041 return, TurboTax will prepare K-1 forms for each partner.

Re: Irrevocable Trust tax prep

shennes1 — Thu, 02 Apr 2020 17:29:14 GMT

Thanks Irene and others who replied.

Will marshal through it.