Can an irrevocable trust make gifts to a 3rd party ?

[jeff_ttx]

I am the trustee of irrevocable trust for my nephew. He is the sole beneficiary of the trust.  In 2019, he directed me to make a gift of $30,000 from his trust to his mother.   This gift is from corpus (principal) and not income.   Does the trust have to file a Form 709 gift tax return for this gift ?   I don't think a Form K-1 has to be filed, because no income was transferred.

[dodgers90210]

Only individuals are required to file gift tax returns. If a trust, estate, partnership, or corporation makes a gift, the individual beneficiaries, partners, or stockholders are considered donors and may be liable for the gift and GST taxes.

[Anonymous]

is this really an irrevocable trust for tax purposes.

Under IRC Section 674(a), the grantor is the owner of any portion of a trust in respect of which the beneficial enjoyment of the corpus or income is subject to a power of disposition, exercisable by the grantor or a nonadverse party, or both, without the approval or consent of any adverse party. “Adverse party” refers to any person with a substantial beneficial interest in a trust that would be adversely affected by the exercise or nonexercise of a power (IRC Section 672(a)).  

thus if he has full power of disposition of corpus or certain other powers, for tax purposes the trust is treated as a grantor trust.  this is crucial because it determines what form of 1041 to file and how and to whom the income is taxed.   just because a trust is titled irrevocable and you are the trustee doesn't mean it treated as a non-grantor trust for tax purposes.