IRS Trust Information

Trust Taxes

If you create a living trust and name yourself as the trustee then you don't ever have to report anything to the IRS. However, if the trustee is not the same person as the person who created the trust, then the trustee must file a Trust Tax Return, Form 1041, each year that the trust exists.

Generally

Most basic living trusts name the trustor, the person who created the trust, as the trustee. For example, Joe Bob creates the Joe Bob Living Trust in which Joe Bob serves as the trustee. Joe Bob does not need to file a trust tax return.

Considerations

Although Joe Bob does not have to file a trust tax return, Joe Bob still needs to file a personal income tax return. On his personal income tax return, Joe Bob will treat all trust property and income as his own personal property and income.

Types

If, however, Joe Bob creates the Job Bob Living Trust and he appoints Sue Beth to serve as the trustee, then Sue Beth must file a trust tax return every year that the trust exists.

Time Frame

Assuming a trust tax return is required, the form 1041 must be filed by April 15, 2010, the same deadline for filing individual income tax returns.

Death

Every trust must have a tax return filed when the trustor dies. For example, if Joe Bob dies in June 2011, his successor trustee must file a trust tax return for the Joe Bob Living Trust by April 15, 2012.

References

• "Nolo's Make Your Own Living Trust;" Attorney Dennis Clifford; 2009
• IRS: Instructions for Form 1041