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Do I need to file a separate return for an Irrevocable Trust?

Does an irrevocable trust file a tax returnMy client is retired and gets Railroad Retirement and a small pension from my father who passed away in 2003.  She has an Irrevocable Trust which holds her savings in an annuity from which she draws monthly income.  Do I need to file a separate federal and state tax return for the trust since it has it's own tax ID?

 

Answers

Wray Rives
Title: CPA CGMA
Company: Rives CPA PLLC
(CPA CGMA, Rives CPA PLLC) |

Good tax accounting question. Any trust that has more than $600 of income or a non-resident alien as its beneficiary has to file an annual tax return, EXCEPT--some irrevocable trusts can be classified as grantor trusts which do not have to file a return as long as the grantor reports all the income and expenses of the trust on his or her 1040. If the trust was set up by the father, he would be the grantor and he is now deceased and I assume no longer filing a tax return, you probably need to file a return for the trust. If the beneficiary is the grantor, then you may not need to file a return.

Sarah Jackson
Title: Associate Editor
Company: Proformative
(Associate Editor, Proformative) |

Howard, you might want to check out this free resource here at Proformative

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