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Final trust tax return with zero income

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    Final trust tax return with zero income

    I know that a trust only needs to file an income tax return if it has enough gross income. For a small trust this can mean that one year filing is required and another year it is not required. Is it advisable to file a final trust tax return with zero after the trust has been dissolve to prevent IRS correspondence?

    #2
    I think it's a good idea for almost any entity to file a return, even if it's not strictly required, but especially in a Trust's final year. Then the "Final Return" box can be checked, and that should stop the IRS from writing to ask why no return was filed.
    Roland Slugg
    "I do what I can."

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      #3
      I agree with Roland - even if -0- on the return, file as such with the Box marked final

      You can also file a form for prompt assessment to limit the term that the IRS has to audit, I believe it is form 4810

      Sandy

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        #4
        Also, you may be cheating the benes out of deductions if you do not file. There are almost always Final Year deductions which pass through on the K-1 for expenses. And maybe Capital Losses if a house was sold.

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          #5
          Thanks, all good points.

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