Sec 645 and Trust fiscal year

Technical topics regarding tax preparation.
#1
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I have been asking about questions related to this topic in another thread. In order not to divert the thread, I think I should start a new thread on it.

A trust will make the 645 election to be on a fiscal year. I have a few miscellaneous questions.

(1) Lets say a decedent has both a trust and a estate, by making the election, is the income of both the trust and the income of the estate to be reported in one single Form 1041?

(2) If only one Form 1041 is to be filed, should the Form 1041 be marked as a trust tax return or an estate tax return?

(3) An FEIN has been applied for the trust. If the 645 election is made, would that FEIN become the tax ID on the Form 1041 that reports the income of both the trust and the estate?
 

#2
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Dave

Taxation is the price we pay for failing to build a civilized society. ~ Mark Skousen
 

#3
Frankly  
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TaxItRight wrote:A trust will make the 645 election to be on a fiscal year.
A way to think of this is that a trust must use the calendar year. The estate can elect a fiscal year. The trust may make an election to combine the trust reporting with that of the estate on the estate 1041. It is the estate that selects a fiscal year end by filing an estate 1041. The trust merely tags along.
 

#4
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SlipperyPencil wrote:
"(3) An FEIN has been applied for the trust. If the 645 election is made, would that FEIN become the tax ID on the Form 1041 that reports the income of both the trust and the estate?"

No


Does that mean the estate has to apply for another FEIN which is to be used on the combined tax return of the estate and the trust after the 645 election?

If that is the case, what are we going to do with the FEIN that has ben applied for the trust? I suppose the IRS will expect a tax return filed on that FEIN, is it right?
 

#5
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Not trying to debate you SlipperyPencil.

viewtopic.php?f=8&t=19014&p=164902&hilit=645#p164902

Just for discussion purpose, if I have read the posts in the above thread correctly, it seems to me some of the posters suggest to just use the FEIN of the trust instead of applying another FEIN for the estate.
 

#6
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Never have obtained a separate estate EIN for a Trust electing 645. Never had any issues come up.
 

#7
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But an EIN has been applied for the trust already, while no EIN has been applied for the estate yet.

So if the trust decides to go with a 645 election, can they use the EIN of the trust to file the combined Form 1041?
 

#8
sjrcpa  
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I get an EIN for the estate, too. It takes 5 mins or less.
You may be able to get away with one. See the 8855 instructions.
 

#9
HowardS  
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If there is an executor you need two EINs.
If there isn't an executor you can use the EIN of the electing trust.
Pages 5 & 6 of the 1041 instructions.


If there isn't an executor. If no
executor has been appointed for the
related estate, the trustee of the electing
trust files Form 1041 as if it was an
estate. File using the TIN that the QRT
obtained after the death of the
decedent. The trustee can choose a
fiscal year as the trust's tax year during
the election period.


If there is an executor. The
following rules apply to filing Form 1041
while the election is in effect.
• The executor of the related estate is
responsible for filing Form 1041 for the
estate and all electing trusts. The return
is filed under the name and TIN of the
related estate. Be sure to check the
Decedent's estate box at the top of
Form 1041 and Item G if the estate has
made a section 645 election. The
executor continues to file Form 1041
during the election period even if the
estate distributes all of its assets before
the end of the election period.
• The Form 1041 includes all items of
income, deduction, and credit for the
estate and all electing trusts.
• For Item G, the executor must provide
the TIN of the electing trust with the
highest total asset value.
Retired, no salvage value.
 

#10
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You said "a decedent has both a trust and a estate".

Did you read the regs?
(ii) Filing requirements -
(A) Filing the Form 1041 for the combined electing trust and related estate during the election period. If there is an executor, the executor files a single income tax return annually (assuming a return is required under section 6012) under the name and TIN of the related estate for the combined electing trust and the related estate. Information regarding the name and TIN of each electing trust must be provided on the Form 1041 as required by the instructions to that form.
Dave

Taxation is the price we pay for failing to build a civilized society. ~ Mark Skousen
 

#11
Doug M  
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I've seen an "administrative trust" entity created to bundle together the trust and estate assets.

If this is a situation where a small amount of assets were erroneously not titled in the trust, and the pour over will catches these assets, I just file the trust return (with the missing estate assets) with the 645 election.
 


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