Does a revocable living trust (containing savings accounts and house) with its own EIN need to file a 1041 return?

Forum|Forum|5 years ago
February 21, 2021
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The attorney obtained the EIN and we transferred assets into the trust using this EIN. Now, when I read more carefully the rules regarding revocable living trusts, it seems that it would have been easier to use my SSN. Can we change the registration back to my SSN for easier tax treatment?

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MAK70

No, a revocable trust, either a revocable land trust or revocable living trust, does not require a tax return filing as long as the grantor is still alive or not incapacitated.

As long the grantor who set up a revocable living trust (RTL) is still alive you don’t need a separate tax ID number.

What do you mean by change the "registration"? If you mean change the tax ID on the assets, that is possible.

jgstackAuthor

The attorney obtained the EIN and the EIN was used when transferring savings accounts and the house into the RLT. We received 1099s from financial institutions with the trust's EIN. Does that now require us to file a 1041? Also, do we use the trust's EIN when when we report the income from the trust's assets on our 1040?

Thank you.

sls50211

If all the assets are in the EIN of the Trust, preparing a grantor Trust return would be a safe option to insure there are no matching issues with the IRS down the line. The grantor trust return will generate a grantor letter for each beneficiary. The grantor letters from the Trust return, with each beneficiary's share of income and expenses, would be included on the beneficiary's tax return. So for example, interest, you would report on your personal return in TurboTax, received from XYZ grantor trust then the amount from trust's grantor letter.

You would need TurboTax Business to prepare the Trust Tax return. This is a desktop program and not available online. Here is a link to the product on Amazon.