Filing a trust for a client

[rose323]

I have a client who is the person in charge of his father's trust. He wants to file a tax return and has a regular w2 and the trust earned rental income in 2022. This is my first time dealing with a trust, what would be the correct forms and steps to start and finish the return accurately? I have been reading about the process. Would appreciate any advice since I would love to retain this client and do a good job. 

[sjrcpa]

The trust got a W-2?

First you need to figure out if you are dealing with an estate, trust or both. A lot of folks around here use the two interchangeably and they are not.

There may also be a final 1040 for the decedent.

The rental property probably needs to be appraised to get the value as of the date of death.

[qbteachmt]

Is the Dad still alive? That would be useful to know. Having a W2:

Dad still works, and the trust also exists. The type of trust matters, by the way.

Or, Dad died in that year, and the W2 is for work that year.

Or, Dad died in the prior year, but the employer had a follow up responsibility, and the W2 is after the date of death. The W2 is in error?

See this:

https://www.irs.gov/pub/irs-utl/decedent-tax-guide.pdf

"If payment was after the year of death, the employer should not report it on Form W-2, and should not withhold Social Security and Medicare taxes. Whether the payment was made in the year of death or after the year of death, the employer also must report the payment to the estate or beneficiary on Form 1099-MISC."

[rose323]

Dad passed away in 2021

The estate (trust) received rent payments for 2022, this is the way he phrased what he has.

The client has his own job and has a w2 to file.

The way he explained the situation is that he has multiple siblings but he is the one who is in charge of the estate. I set up an appointment on Sunday to go over his options. But all he said was that it was an estate trust :(. I asked him more questions but he seemed a little lost. I have read a few articles but since his answers were not clear, I'm not sure where to start. 

[qbteachmt]

"I'm not sure where to start."

So, you have two returns to prepare. You will not put the W2 on the return for the estate/trust. Your taxpayer in charge of the trust is the Trustee. That does not get combined into his own personal tax return. That's where it was confusing to read.

If there is a Trust, there is a Trust Document. It described the trust, the establishment, the type of trust, the provisions, and the beneficiaries.

You might need to make a referral to an estate lawyer, first. This person needs legal guidance.

[rose323]

Thank you, I appreciate everyone's help.  I will sit down and talk with him to see if has received any legal guidance with the estate.