As some of you know I am at the very beginning of the Trust process. My father passed away 5 months ago. I filed Form 56 and will mail his initial Trust 1041 in the near to the IRS future for tax year 2024.
What are the Advantages of form 5495? Are there any Disadvantages? My intuition says that filing it opens up the increased chances of an audits because I bet a lot if Trusts don’t file it. Is the 5495 mainly used when filing the final Trust 1041 or is it also a good idea to file it when filing my father’s Final 1040 this year for tax year 2024?
From an article on the internet:
“Finally, do not confuse this termination process with the need to file IRS Form 5495. Form 5495 releases the fiduciary from personal liability. Form 5495 should still be filed but the IRS has not officially confirmed that it satisfies the requirement for a termination notice of the fiduciary relationship. This is important because, even though the personal representative may be discharged from personal liability, the IRS has 9 months to assess any taxes from an estate and without proper notice, the IRS could assess deficiencies against the personal representative in his or her fiduciary capacity.”
https://www.helpwithestateplanning.com/blog/2019/10/you-are-acting-as-a-personal-representative-does...
https://www.irs.gov/pub/irs-pdf/f5495.pdf
