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kwimpy
New Member

Can anyone give me pos or neg feedback that filed a return for an irrevocable trust with TT Business? I have been paying a CPA, but would like to start doing it myself.

My previous question today has been deleted.  I'm not sure why.  However, I misstated somewhat.  This irrevocable trust contains a ranch with barns, outbuildings and a farmhouse on the property.  There is also a grantor trust within the irrevocable trust that grants a home for a family member to live in.  All income from the trust must be taken out each year and distributed to a designated beneficiary.

Income includes ONLY interest income and rental income.  Expenses are only maintenance, repairs and administrative for the ranch and farmhouse and overseeing the trust.

Is this likely simple enough for me to do on my own using Turbo Tax Business? My experience is in doing individual tax returns and and returns dealing with rental real estate.

2 Replies
kwimpy
New Member

Can anyone give me pos or neg feedback that filed a return for an irrevocable trust with TT Business? I have been paying a CPA, but would like to start doing it myself.

Thank you very much for this helpful advice!
Carl
Level 15

Can anyone give me pos or neg feedback that filed a return for an irrevocable trust with TT Business? I have been paying a CPA, but would like to start doing it myself.

What I would suggest you do for your first year of attempting this on your own, is that you go ahead and pay a CPA to prepare the returns for you with the understanding that you personally will mail the returns to the IRS. Also inform the CPA that you do not want just the forms "required for filing" or just the forms to "keep for your records". Let the CPA know that you want absolutely everything, including all worksheets.
Then once you pay the CPA and have a hard copy of everything, you use TurboTax Business to complete the 1041 on your own. During the process you will most likely have questions, which you can ask here of course. This will not only making your initial "learning curve" less steep, but will also make it easier for you to understand the math and inner workings of just "how things work" tax-wise with a trust. This will be most beneficial to you since you also have a grantor trust within an irrevocable trust.
I myself actually did exactly this back in 2003; but with my personal tax return. I'd been paying a CPA each year since about age 18 to do my taxes. (1978). Come the year 2003 I owned a rental property and had just purchased my second rental. I paid a CPA to do my taxes that year. Cost me about $120. WIth the CPA prepared return I was getting just shy of a $2000 refund.
Then I sat down with TurboTax and starting working it through. One thing that I learned was there was a LOT of things I could deduct from my taxable income. Things that had never occurred to me in the past, therefore I never supplied that information to my CPA.  When I finished working it through the TurboTax program that first time, I was shocked to see the program indicated I was getting a $4000 refund; just over double what the CPA prepared return indicated. I thought surely I'd done something wrong, so deleted the return and worked it through again. But this time, I asked questions in this forum. Guess what? When I finished, same result; $4000 refund. But this time, because I had asked questions in this forum, I "knew" I was right.
Why such a difference between the return I prepared and the one the CPA prepared? Because, the CPA can only work with the information I provide him. Whereas TurboTax asked me questions about things and expenses that I had no clue were deductible. So that's why I suggest you do this your first time, the same way as I did my first time.
I can tell you this for sure though. Since you have a grantor trust within an irrevocable trust, you will need to do the return for the grantor trust "first" and make absolutely certain that it is 100% spot on perfect and correct. Otherwise, if you find a mistake and have to amend to correct it, then you will end up amending the return for the irrevocable trust too. You see, the grantor trust will be issuing tax reporting documents to the irrevocable trust. So that's why you have to do the grantor trust return first.
Just be sure that you get your CPA on it ASAP at tax time. You don't want to find yourself down to the wire and end up not having enough time for all this, putting you in a situation where you have to file the CPA prepared returns in order to avoid late filing fees and the such.
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