Mary
Is this an IRREVOCABLE or a revocable..
I know you said IRREVOCABLE but I wanted to clarify.
Of course the trust document will answer your questions.... But allow me to confirm the abovl
Abby Alhante, CPA
Kurcias & Alhante, LLC CPAs
525 Broadhollow Road Suite 104
Melville NY 11747
516.829-5890 Ext 2 Fax 516-829-3976
Mobile 516-381-9301
AbbyA@KurciasAlhanteCPAs.com
( E mail response preferred )
Original Message:
Sent: 7/22/2024 9:36:00 AM
From: Mary Sherman
Subject: irrevocable grantor trust when grantor dies
I have several questions about what happens to an irrevocable grantor trust when the grantor dies. I'm hoping someone can help me with these, or point me in the right direction, or advise who I may need to consult with.
- Is a new tax ID needed for the trust as of the DOD?
- In the year of death (2024), what boxes are checked on the trust 1041 page 1 A: grantor type trust (from 1/1 to DOD) and complex trust (from DOD and forward)?
- Income in the year of death: presumably the income from 1/1 to DOD will continue to be reported on an attachment and flow through to the grantor's final 1040. What happens with the income from DOD forward? If not paid out or required to be paid out in year of death, is the post-DOD 2024 income taxable to the trust or is it still reported on K-1's to ultimate beneficiaries?
- Although the trust specifies that it's assets should be distributed after the grantor's death, that probably won't happen until the following year (2025) as some assets outside the trust have to be probated. That being the case, what box(es) are checked on the 1041 page 1 A: complex trust?
- Since presumably, everything will be distributed in 2025, is the 2025 income reported on K-1's to the beneficiaries and not taxed at the trust level?
- The probated assets: do they have to first go through an estate with it's own tax ID and 1041 and then moved into the trust (so the decedent's estate box would never be checked on the trust return)?
Feedback is appreciated.
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Mary Sherman
CPA
MARY SHERMAN, CPA
Hicksville NY
516-433-3734
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