Trust Tax Return

[Looney1966]

We have a Living Trust where my mother in law is the grantor, my husband is the beneficiary and I am the executor.  We put rental property into the trust and then opened a LLC for that property.  Do we add the income and expenses for that rental (Schedule E) on my husband and my personal taxes or do we have to file a Trust tax return?  We do not have an EIN number.  I keep getting conflicting information and want it to be done correctly on our taxes

[PatriciaV]

Who owns the LLC? If the trust is the sole owner of the LLC, then the activity for the trust is reported on the grantor's tax return. 

But if the LLC is owned by more than one person/entity, the LLC needs to file a partnership tax return. Schedule K-1 from that return would be sent to the members, to be included on their tax returns. Again, the activity for the grantor trust would be reported on the grantor's tax return.

[Looney1966]

The trust is the owner of the LLC and my mother in law is the Grantor.  I am the trustee and my husband is the beneficiary.  Just confused as to where I report the Rental income and expenses

[PatriciaV]

If the trust is the sole owner of the LLC, all the trust activity is reported on the grantor's tax return. That includes rental income and expenses. From the IRS' perspective, the grantor trust doesn't exist, so all the activity goes to the grantor.

Additional Information:

• Where do I enter income and expenses from a rental property?
• What kinds of rental property expenses can I deduct?
• How do I handle capital improvements and depreciation for my rental?