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Posted by ed on November 6, 2007, 6:25 am
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>>> When one establishes a Revocable Trust to shield assets from
>>> probate, what ramifications, if any, are there for tax
>>> preparation? Does a tax return of any kind have to be filed
>>> for the trust? Would I still file a 1040?
>> The filing requirement for the 1041 are independent of the
>> filing requirements for the 1040.
>> Each stands on its own.
>> Generally, the filing requirement depends on income.
>> Remember to also check the state filing requirements for the
>> individual and trust tax returns.
>> Each state has its own rules.
> I'm not clear what your answer means. Do you disagree with
> the other posters that a 1041 is not needed and that I
> report income on my 1040 just as I always have? What do
> you mean about the income requirement determining filing?
The instructions for 1041 are quite specific that you MUST NOT
file it for a standard revocable trust. Until the first death, you
ignore that it is a trust for tax purposes. File 1040 as usual
ignoring that you have a revocable trust.
ed
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