Technical topics regarding tax preparation.
Trust Filing Requirement 101
23-May-2020 10:46am
Sorry for a basic question, but I'm not grasping what I'm being told by the 1041 instructions and can't find any clarification.
I have an irrevocable trust, not required to distribute income and they did not in 2019, but it was only $200 of interest income (cash the only trust asset). And they paid accounting fees of $400.
Per the instructions, if they had "any taxable income" they are required to file a 1041. Is taxable income defined as $200? Or $200 less the accounting fees/exemption amount?
I think the latter, which would mean we have no filing requirement, but I can't find any guidance to confirm.
23-May-2020 12:26pm
Gross income=$200. Taxable income -$300 ($200-$400-$100 exemption for a complex trust).
23-May-2020 12:33pm
Sec 6012(a)(4) and sec 67(e) and sec 642(b)(2).
23-May-2020 1:02pm
Thank you for the response and the cites. I assumed that was the case, but couldn't confirm.
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