Form 1041 for each account?

[Eplunk]

My father passed away December 2024. He had two revokable trusts and assets that went to an estate as well.  As his executor, I obtained 3 EIN numbers to keep those accounts and assets separate.  Do I need to file three separate 1041 returns? And is income reported as that income earned from date of death to December 31, 2024? There have been no distributions at this time, and the only earnings from stocks have been reinvested, not distributed.  There may have been a couple of annuity payments deposited into his bank account after death.

Thank you

[M-MTax · Accepted solution]

I am sorry for your loss.

In short, you need to file three returns (two trust 1041s and one estate 1041) assuming the trusts and estate exceed the income threshold for filing.

There is such a thing as a Section 645 election where QRTs are treated as part of the estate and then, if made, a trust is treated as part of the estate and one return is file (for the estate). However, the procedure is rather complex and outside the DIY arena.

See https://www.thetaxadviser.com/issues/2024/may/the-sec-645-election-to-treat-a-trust-as-part-of-the-e...

[DavidD66]

The estate has to file a tax return if it had income of $600 or more.  If less than that, no return needs to be filed.  The trusts have to file a (separate) tax return if they have any taxable income.  If no taxable income, and total income less than $600 the trusts do not have to file a return.   

There is also the option to combine the two trusts if they have the same beneficiaries and are substantially the same.  However, based on your brief description it doesn't sound like that would be cost effective, as you would have to pay an attorney to draft a new trust document.  

[M-MTax]

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@DavidD66 wrote:  

..... based on your brief description it doesn't sound like that would be cost effective, as you would have to pay an attorney to draft a new trust document.  

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...and then obtain yet another EIN for the new trust.

[Eplunk]

@M-MTax-  thank you…I agree that the 645 seems complicated.