Does a revocable living trust (containing savings accounts and house) with its own EIN need to file a 1041 return?

[jgstack]

The attorney obtained the EIN and we transferred assets into the trust using this EIN. Now, when I read more carefully the rules regarding revocable living trusts, it seems that it would have been easier to use my SSN. Can we change the registration back to my SSN for easier tax treatment?

[MaryK4]

No, a revocable trust, either a revocable land trust or revocable living trust, does not require a tax return filing as long as the grantor is still alive or not incapacitated.  

As long the grantor who set up a revocable living trust (RTL) is still alive you don’t need a separate tax ID number. 

What do you mean by change the "registration"?  If you mean change the tax ID on the assets, that is possible.

[jgstack]

The attorney obtained the EIN and the EIN was used when transferring savings accounts and the house into the RLT. We received 1099s from financial institutions with the trust's EIN. Does that now require us to file a 1041? Also, do we use the trust's EIN when when we report the income from the trust's assets on our 1040?

Thank you.

[SamS1]

If all the assets are in the EIN of the Trust, preparing a grantor Trust return would be a safe option to insure there are no matching issues with the IRS down the line.  The grantor trust return will generate a grantor letter for each beneficiary.  The grantor letters from the Trust return, with each beneficiary's share of income and expenses, would be included on the beneficiary's tax return.  So for example, interest, you would report on your personal return in TurboTax, received from XYZ grantor trust then the amount from trust's grantor letter.  

You would need TurboTax Business to prepare the Trust Tax return.  This is a desktop program and not available online.  Here is a link to the product on Amazon.

[sheddgm]

"What do you mean by change the "registration"?  If you mean change the tax ID on the assets, that is possible."

It IS possible, similar to the way that it is possible to run a marathon! In over 15 hours on the phone, across half a dozen calls and 12 months, I could not get Vanguard to change the Tax ID's on two living trusts I opened for my nieces. Their ONLY solution: Close the accounts and open new ones. That's what I ended up doing...at Fidelity!

In a similar vein, I have found it impossible to get Vanguard or 2 credit unions to change the Tax ID on a 1099 (DIV and INT). They simply say it is impossible. Then why is there a checkbox on the Form that says "corrected"? And why is there a section in the IRS document for 1099 creators that describes how (and when and why) to correct Tax ID's? Furthermore, the IRS says, corrections of tax ID's are required no later than in the year following the year in which the 1099 creator was informed of an error (they can get a get an exception for the first year), at which point they start arguing over the definition of an error, and whose fault it was.

When there is a mismatch between the EIN of a Grantor Trust, and the SSN of the Grantor, it is best to do as suggested: Use TT for Business (and estates and trusts) to file a 1041 for the Trust, and generate a letter to the Grantor covering the Trust income that should be included on the Grantor's 1040.