Do I need to add Beneficiaries on Final 1041?

[dude7707]

Facts:  T/P's died in 2024, there was only a revocable living trust.  Attorney setup bypass trust, by applying for FEIN, however, no assets were placed in this trust.  Recommended just show no activity and mark final.

Prepared final 1041 showing no beneficiaries since no K-1's will be issued.

Q1:  Is this the proper filing of this FINAL 1041 given the limited facts above?

Q2:  If yes, then how do you eliminate the error showing under list of beneficiaries -

        beneficiaries' percentages does not equal 100%.  Tried to remove this list however error still

        shows.  Or just ignore?

[sjrcpa]

Personally I don't think I'd file a return at all since not required. But if lawyer wants it and someone is paying for it, OK.

Who were the beneficiaries of the trust even though it wasn't funded? You could issue zero K-1s to them. Otherwise I think you'll be stuck paper filing that return.

Abide.

[BobKamman]

I agree with @sjrcpa that no return is required.  Some time in the last decade, or maybe in the last millennium, IRS may have sent a notice to a sample of trust EIN applicants who didn't file returns, asking why not.  They probably got a lot of "no income" responses, and decided such a project is not worth the postage.  But now the OCD branch of the Preparer Community thinks every EIN deserves a return.  And of course, they have as evidence the fact that IRS sends ES forms to trusts and estates that might have owed tax six years ago.  

[dude7707]

Personally I don't think I'd file a return at all since not required.  Not sure this can be done, considering

now the IRS has a EIN to match to return.  This is why I would file and mark final so to satisify the filing

requirement and close this trust.

Who were the beneficiaries of the trust even though it wasn't funded?  - The T/P's 3 sons.

You could issue zero K-1s to them.  Thought that would be an option and would eliminate the error I mentioned above.

Otherwise I think you'll be stuck paper filing that return.

[Accountant-Man]

I know what a revocable living trust is, and I know what a living will is, but I've never heard of a revocable living will trust.

You don't have to file when income is too low, but the understaffed IRS might come after you if you applied for an EIN and never filed. Maybe, but not definitely.

This is not your issue, but if an estate or trust has capital sales, like stocks or mutual finds, and the sales proceeds exceed the $600/$100 exemption, I want to file to have it on record that any gain was low or a loss was incurred.

[dude7707]

I know what a revocable living trust is, and I know what a living will is, but I've never heard of a revocable living will trust. - Correction, this is a revocable living trust.

[BobKamman]

now the IRS has a EIN to match to return.  This is why I would file and mark final so to satisfy the filing

The IRS also has an SSN to match to a name.  They could have been tracking it for the last 20 years, and when it drops off someone else's return as a dependent they might wonder why it has not been filing its own return.  So, everyone should file a return, even if they don't have any income, just in case IRS asks.  

[dude7707]

now the IRS has a EIN to match to return.  This is why I would file and mark final so to satisfy the filing

and file the 3 beneficiarie's K-1's even though as you stated there is no activity.