Final trust tax return with zero income

[Gretel]

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?

[Roland Slugg]

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.

[S T]

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

[Burke]

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.

[Gretel]

Thanks, all good points.