Question

Survivor trust V’s family trust tax returns

Forum|Forum|4 years ago
January 26, 2022
1 reply
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My mother and father had a living trust for over 10 yrs.

My father passed away February 2021. We gathered the data necessary to transition from the living trust, appraisals etc. we split The living trust into a survivor trust and a family trust. We funded the family in June after 50% of all assets had been deeded into the family trust by the trust attorney. The other 50% went into the survivor trust.

I realize I have to do a tax return for the family trust as I have an EIN number for it, and a separate tax return under my mothers Social Security which is the survivors trust.

My mother and father have rental properties. It previously wasincluded 100% in the living trust under their personal Social Security’s. Now half of all values and all property and monies were deeded into the family trust tax return.

What assets and what period of time does the family trust tax return deal with ?

Is it just a 1040?
Will it encompass the whole year, or a partial year starting when my father passed away, or a partial years starting when the family trust was funded?
Thank you,

trish

D

DianeW777

The assets that belong to the family trust must be filed under the family trust. Splitting equally may not be logical for books and records to accurately reflect for each return. However you can enter everything 100% and then show 50% ownership. This should work perfectly for each trust.

For the remainder of the surviving spouse's life, the Survivor Trust would likely continue on as a revocable trust, wholly under the control of the surviving spouse. If this is the case, the survivor reports all income, capital gains or losses, and deductions on his or her personal tax return, no trust income tax filing is necessary.

It will be a partial year beginning immediately following the date of death assuming there was income activity in the first month of 2021.

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H

HoeyAuthor

After my father‘s death in February through December if I list all of the rental income on the family trust return 1041, what line item do I use to reduce it by 50%?

R

RobertB4444

Before entering any of the amounts TurboTax should ask you what percentage of ownership the trust has over the rental properties. You enter 50%. Then it will divide all of your rental entries in half for you.

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