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See what's trending for the November 15th deadline (Form 990) and resources for the upcoming tax season. View Lacerte Hot Topics.
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- Re: what do I file after decendent's living trust now has an EIN, with income but trustees haven't distributed
what do I file after decendent's living trust now has an EIN, with income but trustees haven't distributed
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MarlaE
Level 1
05-17-2021
06:12 PM
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My client died in april 2020. I have filed her tax return from Jan thru april. there is a Living Trust now that has an EIN. nothing has been distributed. there are 2 trustees and they each have a lawyer involved. The trust did make a little bit of money, but I don't know what form to use? can I put an extension in?
it is not an estate yet because nothing has been decided by the trustees. Help I know I am in over my head but clients dau
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PKCPAMST
Level 5
05-17-2021
09:30 PM
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When an individual dies, a new entity, distinct from the deceased, called an estate, comes into existence.
You need to look closely at the trust document to see what the grantor intended for the trust after their death. Did they want the trust to terminate upon death? Did they want the trust to continue as a separate taxable trust?
An estate can use a fiscal or calendar year for tax reporting, while a trust must adopt a calendar year. That means, an irrevocable trust that came into existence in 2020 had April 15, 2021 to file an income tax return or an extension.
An EIN is required for both estates and trusts meeting certain conditions. So, you want to look at who the EIN belongs to.
BobKamman
Level 15
05-17-2021
11:00 PM
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Your first three words are the most important. "My client died." So , who is your client now? Did the two trustees hire you and pay you? Who applied for the EIN? Did anyone request an extension for the Form 1041 that may have to be filed, and has it been decided whether that will be done for a calendar year or a fiscal year? Why are two lawyers involved?
