Election to treat QRT as part of Estate

[Gretel]

TP died, had revocable trust, now irrevocable and pour over will, meaning all assets are in trust, no separate tax return for estate. Beside the difference of filing calender year versus fisal year, what are the advantages/disadvantages of either?

[Roland Slugg]

Does anyone else here understand what Gretel is asking? Or for that matter what QRT stands for? I do not.

[Gretel]

Sorry, it's Qualified Revocable Trust.

[Burke]

Yes, it is advantageous to make this election (on page 2 of the 1041) as it allows you to do only one tax return, not two -- (i.e, one for the estate and one for the trust.) Also, it allows the election of a fiscal year, as you mention. It is available only for the first two years of the estate, and the election is made by the executor and/or the trustee. See the IRS instructions for Form 1041.

[Gretel]

Burke, thanks. I a aware of the points you mentioned but thought there might be something else. In my case there is no estate income, so it would only be one return anyway. I will have to make this decision later on this year.

[Burke]

If you wish a fiscal year, you should make the election. Otherwise, it is not available for a trust.

[Gretel]

Thanks, I understand.