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tomc17irs
February 9, 2023
Solved

I set up a revocable trust for my children. I earned less than $400 dollars interest on the account. What version and form do I need to use in Turbo Tax?

  • February 9, 2023
  • 2 replies
  • 0 views
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Best answer by Anonymous_

What version and form do I need to use in Turbo Tax?

 

Since you are grantor, most likely the trustee, and the trust is revocable, the trust would be considered to be a grantor trust by the IRS. 

 

See https://www.irs.gov/businesses/small-businesses-self-employed/abusive-trust-tax-evasion-schemes-questions-and-answers

 

As a result, the income earned by the trust would be reported on your (the grantor's) individual income tax return (Form 1040).

2 replies

A
Anonymous_Answer
Employee
February 9, 2023

What version and form do I need to use in Turbo Tax?

 

Since you are grantor, most likely the trustee, and the trust is revocable, the trust would be considered to be a grantor trust by the IRS. 

 

See https://www.irs.gov/businesses/small-businesses-self-employed/abusive-trust-tax-evasion-schemes-questions-and-answers

 

As a result, the income earned by the trust would be reported on your (the grantor's) individual income tax return (Form 1040).

    M
    Mike9241
    February 9, 2023

    did the trust get an ein number and are the 1099's it receives under that EIN or the SSNs of the children

    *

    if income is over $600 and both conditions are met regarding the EIN a grantor trust - form 1041  must be filed.

    that's Turbotax business only for windows desktop 

      A
      Anonymous_
      Employee
      February 9, 2023

      Even if the trust has an EIN, an optional filing method can be used for a grantor trust, rather than filing a 1041.

       

      See https://www.irs.gov/instructions/i1041#en_US_2022_publink1000286018

        M
        MinhT1
        February 9, 2023

        Any income generated by a revocable trust is taxable to the trust's creator (who is often also referred to as a settlor, trustor, or grantor) during the trust creator's lifetime.

         

        If you are the grantor, you include this interest income in your personal tax return.

         

        As to the version of TurboTax that you need, it may depend on the other types of income and deductions that you have.

         

        Please read this comparison between different versions of TurboTax online, or

         

        this comparison between different versions of TurboTax Desktop.

         

         

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