Form 1041 - Check All That Apply

[trust812]

My father passed away 3 months ago. He had a Revocable Trust which became an Irrevocable Trust when he passed away. My father’s Estate lawyer obtained a new EIN for the Trust. I am going to hire a CPA to file form 1041. Looking at form 1041 it’s ask to choose all that apply (below). I would think “Decedent’s Estate” and “Grantor Type Trust” apply since my father was the Grantor of his Trust and is now deceased. I am not sure whether it’s a “Simple Trust” or “Complex Trust”. I would think Complex because the terms of the Trust say that Principal can remain in the Trust and doesn’t have to be distributed right away.

Check all that apply:

1) Decedent’s estate

2) Simple trust

3) Complex trust

4) Qualified disability trust

5) ESBT (S portion only)

6) Grantor type trust

7) Bankruptcy estate—Ch. 7

8 ) Bankruptcy estate—Ch. 11

9) Pooled income fund

[M-MTax]

Grantor trust is no longer applicable since the trust is now irrevocable and a separate taxable entity.

You can make what is called a Section 645 election to treat the trust (which is a QRT) as part of the estate). In that case, there are two things you need to know;

1) The Decedent’s estate box would be checked; and

2) You need a tax pro or tax attorney to prepare the return. It is not something you should be attempting yourself as the rules are very complicated.

Otherwise, for s trust you would check Simple Trust if the trust is required to distribute income currently, there are no set asides for charitable contributions, and any part of the corpus of the trust is not being distributed. Otherwise, the Complex box would be checked. Form 1041 trust types 

I understand that is as clear as mud so you should rely on your attorney or a tax pro to prepare the forms and docs for the IRS.

Sorry for your loss.