Trust form 7004 questions

I recently became successor trustee of three different (now irrevocable) trusts and I'm responsible for filing all of their 2023 taxes.

I plan to file an extension for each trust, form 7004.

I see on the instructions that I need to mail the form to Ogden Utah, because the trust is based in California. Two of the trusts will owe taxes and I understand I need to pay them at the same time that I file the extension.

1. Does the IRS accept checks?

2. And do I send that check with the form to the same address in Ogden Utah? Or do I send it separately somewhere else?

3. Since I have to file three extensions, can I separate them by small envelopes but ship them all together in one large envelope? Or do I need to separate them completely?

My next question has to do with the newest Trust which had a partial tax year. My stepfather passed away on October 20, but we did not receive his EIN until November 20th.

4) Does his EIN trust tax year begin on his date of death, the day after, or the date we received his EIN?

Finally, I just hope for clarification because I've gotten 2 different answers from 2 different CPAs and would love a third opinion:

5) Is a trust considered a business that needs to file a 1099-NEC for attorney fees paid? There were no business activities or businesses held within the trust.

Thank you!

3854

3 Replies

Level 15

Apr 1, 2024 9:35:40 AM

@NaySao wrote:
....Is a trust considered a business that needs to file a 1099-NEC for attorney fees paid? There were no business activities or businesses held within the trust.

A trust is not typically considered to be a "trade or business" for federal income tax purposes (see IRS definition below).

https://www.irs.gov/charities-non-profits/trade-or-business-defined

The term trade or business generally includes any activity carried on for the production of income from selling goods or performing services. It is not limited to integrated aggregates of assets, activities, and goodwill that comprise businesses for purposes of certain other provisions of the Internal Revenue Code. Activities of producing or distributing goods or performing services from which gross income is derived do not lose their identity as trades or businesses merely because they are carried on within a larger framework of other activities that may, or may not, be related to the organization's exempt purposes.

Level 15

Apr 1, 2024 9:38:31 AM

@NaySao wrote:
....Does his EIN trust tax year begin on his date of death, the day after, or the date we received his EIN?

Trusts report on a calendar year basis.

See https://www.law.cornell.edu/uscode/text/26/644

The trust's tax year would technically begin on the date the trust became revocable (i.e., date of death).

Level 15

Apr 1, 2024 9:42:26 AM

The IRS accepts checks unless the amount is $100 million or more.

You would send the form(s) to the Ogden, Utah address and you're better off mailing each in a separate envelope.

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Trust form 7004 questions