Federal & State Forms 1041 for 2024

[carriskoul]

Hello - I am filing a 1041 for the first time (2024 taxes) for both Federal and Illinois.

My wife and I are the grantors and the trustees.  It is a Grantor Trust with its own EIN containing a condo and a brokerage account.  The brokerage account in the trust produced some capital gains and some dividends.  I understand that this income will simply be reported on our personal 1040 joint filing as our income and not on the 1041 form.  I see examples online of attaching to form 1041 a "Grantor Statement" summarizing the income produced in the brokerage account and will include my name, address, and SSN.

A few questions about the federal filing:

1. Anything else I need to be aware of for filing if not noted above?
2. Do I need to attach a copy of my entire 1040 filing (with all its Schedules) behind the 1041 form?
3. If not, (this may be a redundant question) do I need to attach any of my 1040 Schedules (i.e. Sch-B/D) reporting the Trusts' income (i.e. from brokerage 1099-DIV) behind the 1041 form?
4. For this "Grantor Statement", where can I find such a form, or may this simply be an "attachment" created by myself (i.e. in MS Word, Excel, etc.)?
5. I am using T-Tax Deluxe for my 1040 filing.  I plan to simply use a 1041 PDF form and mail it for the Grantor Trust filing.  Is this fine for now?  (I know T-Tax Business is available but don't believe I need it for my case here)

A few questions about my Illinois filing:

1. Do I submit an IL-1041 form in the same manner as the federal filing?
2. If so, same as above, is it fine to submit my IL-1040 through T-Tax and mail in the IL-1041 (without needing to purchase T-Tax Business for State)?

Thank you!

[DaveF1006]

Yes, you are correct. When filing Form 1041, you can attach a "Grantor Statement" that summarizes the income produced by the trust. This statement should include your name, address, and SSN, and it will direct the IRS to your personal tax return for the detailed reporting of the trust's income.

Here are a few steps to help you with the process:

1. Prepare Form 1041: Complete the basic information on Form 1041, including the trust's EIN and other identifying details.
2. Attach the Grantor Statement: Include a statement that summarizes the income produced by the trust and indicates that this income is reported on your personal 1040 joint filing.
3. Report Income on Form 1040: Ensure that all income generated by the trust is accurately reported on your personal 1040 joint filing.

No, you do not need to to include any portion of your 1040 return and attach to your 1040. This is not a formal statement  that has a a form assigned to it. It can be written in word or other type document you are comfortable in using. You can prepare the 1041 on your own if you feel comfortable doing this.

Since IL-1040 and IL-1041 are two different returns, you may mail your IL-1041 and electronically file IL-1040.  This is perfectly acceptable.  Here are a couple of references that may be of interest to you.

 

Grantor Trusts: Tax Returns, Reporting Requirements and Options

How to Use a Grantor Tax Information Letter for Tax Reporting

[carriskoul]

Thank you Dave for your response.

One detail I left out and am not sure will make a difference in your previous response is that this is a "revocable" grantor trust.  I assume everything you replied about still applies.

Just a clarification on your statement here "No, you do not need to to include any portion of your 1040 return and attach to your 1040."  <-- did you mean ....and attach it to your 1041?

"3. Report Income on Form 1040: Ensure that all income generated by the trust is accurately reported on your personal 1040 joint filing." <--  Meaning that the amounts (i.e. box 1a and 1b dividends and box 2a capital gains from the Trust's 1099-DIV) match with the 1041 Grantor Statement information?

If I electronically import the brokerage's 1099-DIV for the Trust, T-Tax will populate accordingly along with any other regular electronic 1099 imports of my own (i.e. all 1099-DIV's imported total capital gains distributions tallied to Sch D line 13 & total ordinary dividends to Sch B Part-II, of course, those are line by line itemized entries and you will know what came from which brokerage account).

Just wanted to be sure that there was no special entry in T-Tax Deluxe for the Trust's 1099-DIV income (i.e. don't believe there is an entry for the Trust's name or other details) vs. my regular 1099-DIV income when I go through my 1040 interview in T-Tax.

*Form 8960 does not come into play for this scenario (ie. Part-III lines 18-21) - correct?

[RobertB4444 · Accepted solution]

1. No, that doesn't change anything.

2. @DaveF1006 did mean 1041.

3. Correct

4. No, there are no special entries.  The grantor statement already notified the IRS that this income would be on your 1040.

5. Form 8960 may come into play depending on whether your income levels trigger it.  If so then TurboTax will generate the form automatically.

@carriskoul