Taxpayer has a grantor trust. He is initial Trustee. He resigns and successor Trustee steps in as Trustee. According to TB pages 20-20 and 20-21, a new tax ID number needs to be obtained, and a 1041 needs to be filed. However, the 1041 should not contain income, deductions, or expenses, but merely have a list attached detailing the same. Does this mean:
1) Report all investment income on the 1040 as usual
2) Prepare a blank 1041 (except for name, address, and tax ID) and attach a list recapping the income from assets held inside the Trust)
If this is accurate, what is the point? Also:
1) Does one do W9s for the investment companies putting all assets into the tax ID number of the Trust even though the 1041 does not report the income or do you leave the assets in the Grantor's SSN?
What am I missing here? This seems crazy. I have read subsection J of the IRS code and still don't have a clear picture.
Thanks in advance.
jas
1) Report all investment income on the 1040 as usual
2) Prepare a blank 1041 (except for name, address, and tax ID) and attach a list recapping the income from assets held inside the Trust)
If this is accurate, what is the point? Also:
1) Does one do W9s for the investment companies putting all assets into the tax ID number of the Trust even though the 1041 does not report the income or do you leave the assets in the Grantor's SSN?
What am I missing here? This seems crazy. I have read subsection J of the IRS code and still don't have a clear picture.
Thanks in advance.
jas
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