1041 and 8855 election

[Sparky]

Client died 10/4/2009, assets were all distributed under Trust EIN 5/2010. If I do the 8855 the longest estate year date would be 9/30/2010, due date Jan. 15, 2011. If I want to wait and receive year end statements from brokers, I would need to file an extension; Would I have to get another EIN for the estate? I have read in the TB if no executor than Trust EIN can be used. But, what number do I file the extension under?

Sometimes I feel like this is all a big ugly maze!

[Burke]

A little clarification please. Was this a Revocable Living Trust which contained all assets of the estate? No probate? Nothing outside the trust which had to be accounted for, sold, etc? So a return is required due to estate/trust income exceeding $600? A trustee of a QRT making this election is required to get a new EIN for the trust after the date of death. It is this number that goes on the 8855. If the estate goes through probate and an executor of the estate is appointed, then the executor is the one who makes the election, and he must obtain an EIN for the estate. It is this number that goes the extension form and the tax return. You cannot file the return under the old trust EIN. Thereafter, the estate and the trust are considered together as one estate.

[Sparky]

Thank you for your help. Yes, all assets were in a Revocable Living Trust; no probate; yes a return is required for income over $600. The trust received an EIN in May of 2010, prior to that there was no EIN for the Trust. It was after the date of death (10/4/09).

So, am I correct to just utilize the one EIN, file an extension so I can receive the reporting info. in January, and title the 1041 Revocable Living Trust, and check off "decedents Estate"?

[Burke]

If no executor has been apoointed for the related estate, the trustee of the electing trust files Form 1041 as if it were an estate. Use the TIN obtained for the trust. The trustee can choose a fiscal year as the trust's tax year during the election period. You check the Decedent's estate box at the top of page 1. If there will be only one return, you also check it Final. The election period as well as the estate/trust year begins on the date of the decedent's death and terminates on the day which the electing trust and related estate distribute all of their assets. So it seems to me, in your case, the tax year is 10/24/09 to 05/30/10. Return is due 9/15/10. Extension will push out another 5 months.

[Sparky]

Thanks Burke. I'm going to do an extension. Last yr. I studied for my EA, and the whole process was laughable. Who can make sense of all these rules and regs?? Sometimes I think cave men had an easier life.

[JohnH]

Cave men did have a simpler life. Nothing much to worry about until a wild animal wandered into your camp and ate you, or another cave man decided he wanted your stuff & your wife so he killed you. One or the other was fairly certain to happen by about age 28, but up until that time life was pretty much a breeze.