Do I have to file a Form 1041 for a decedents trust that has interest income of $24 for the year?

[standee]

My dad died. The beneficiary was the trust. The trust had an interest income of $24 for the rear. As the trustee, am I required to file an income tax return?

[tagteam · Accepted solution]

"As the trustee, am I required to file an income tax return? "

If the trust retained the $24 of interest income and had no additional income, you can forget about filing a Form 1041 income tax return (the total income does not exceed either the $100 or $300 exemption), despite the fact that it would certainly be a good practice to do so. 

If you distributed the income to the beneficiary(ies), then file Form 1041, and associated K-1(s), so the beneficiary(ies) can report the income on personal income tax return(s).

[trusttaxes123xyz]

what if the beneficiary doesn't have enough income to file a 1040? what would he/she do with the k-1?

[honeychuck]

If the trustee files the 1041 with K-1 for the distributed $24 interest (even though not required to file the 1041 because there was no trust taxable income) must the trustee also file the state equivalent (Virginia 770)?

[tagteam]

@honeychuck 

The fiduciary of a resident estate or trust must file a return if the estate or trust is required to file a federal fiduciary income tax return (Form 1041), or if it had any Virginia taxable income.

See https://www.tax.virginia.gov/fiduciary-income-tax