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See what's trending for the November 15th deadline (Form 990) and resources for the upcoming tax season. View ProSeries Hot Topics.
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- 1041 Trust converts from complex to simple trust during year
1041 Trust converts from complex to simple trust during year
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DENNYCARR
Level 3
03-20-2022
03:12 PM
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In January, Mom was the only beneficiary, and the Trust was complex [trustees not required to pay all income]. Then Mom dies.
From February to December, four Daughters are the beneficiaries, and the Trust requires all income to be paid.
Do I need 2 returns for the year?
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2 Comments 2
BobKamman
Level 15
03-20-2022
07:22 PM
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Were separate trusts created for each daughter? Have you checked the trust document to make sure? Otherwise, it's not uncommon for trusts to switch back and forth from complex to simple. It doesn't mean a new entity has been created with new filing requirements.
DENNYCARR
Level 3
03-21-2022
08:57 AM
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Mom's trust does not create 4 new trusts for the daughters when Mom dies. Mom's trust continues after Mom's death and the daughters become beneficiaries of Mom's trust after Mom's death. I understand that a trust can be simple 1 year and complex the next year. But, in this case, the trust was both simple and complex within 1 year. How do I report that? Or is the trust considered complex for the full year because it was complex on 12/31....?
