Author Topic: Estate / tax law / trust question - Form 1041 filing?  (Read 353 times)

FIRE 20/20

  • Bristles
  • ***
  • Posts: 350
Estate / tax law / trust question - Form 1041 filing?
« on: February 25, 2019, 07:41:53 AM »
A friend has the following question, and I thought there might be someone here with knowledge of tax law, estates, and trusts who might be able to help:

My father passed away in November 2016. Per the instructions in his will (I was the executor), I established a trust for my sister in 2018. I am the designated trustee, and the trust remains open with $6k. The trust earned $66 in interest income in 2018. Do I need to file a 1041 for the trust? The instructions seem to clearly indicate that I do not need to do so (income less than the $100 dollar exemption so no taxable income, less than $600 gross income  and not a resident alien), but I have read that it is “good practice” to file the form anyway. Can anyone clarify what the benefit of filing it would be in the case where there is so little income and no other deductions?

secondcor521

  • Handlebar Stache
  • *****
  • Posts: 2419
  • Age: 50
  • Location: Boise, Idaho
  • Big cattle, no hat.
    • Age of Eon - Overwatch player videos
Re: Estate / tax law / trust question - Form 1041 filing?
« Reply #1 on: February 25, 2019, 11:11:25 AM »
I would not file a 1041 (or 1040) with the IRS unless required to do so.  When I file my return, I include the forms and schedules and statements they say to include and do not include anything else.  In general, I try to follow the rules and instructions given by the IRS.  First, because I want to be compliant with the law.  Second, because I figure if they put something in the instructions then that's the way they want it, and doing anything differently is just going to lead to more confusion and questions and time wasted by all.

I believe there is no benefit to filing the 1041 given the facts as described, and I think there is a very very slight harm in doing so (the confusion and waste of time as noted above).