My stepfather who passed had a living trust where I was named as the successor trustee. My mother passed several years ago so he was single at the time of his death. He didn't have many assets - a SUV, some coins, bank account, 50K life insurance policy, a few other items - no more than $100K (including insurance) I would estimate and all part of the trust.
His trust specifies that 1 person gets $5K, a non-profit gets $5K and than the balance s is split between my brother and I.
1) I understand a tax return needs to be filed for the trust, does one need to be filed for my stepfather too or is it all part of the trust? (If it matters my stepfather main source of income was social security)
2) What is taxable as part of the trust?
3) Anything else I should know?
It sounds to me like you have it backwards. You will definitely need to file a final income tax return (Form 1040) for your father. You may or may not need to file one for the trust. You are going to need to get a Tax ID number (EIN) for the trust, because your father's social security number cannot be used, now that he is deceased. The estate does not need to file a tax return unless it earns more than $600 income, over the course of the year. It may be a good idea to file a return, (Form 1041) ANYWAY, because that will cause the IRS to close the books on the trust, as well. Otherwise, they might send you a letter a couple years from now, asking why you have not filed anything.
*** LEGAL DISCLAIMER I am licensed to practice law in the State of Michigan and have offices in Wayne and Ingham Counties. My practice is focused in the areas of estate planning and probate administration. I am ethically required to state that the above answer does not create an attorney/client relationship. These responses should be considered general legal education and are intended to provide general information about the question asked. Frequently, the question does not include important facts that, if known, could significantly change the answer. Information provided on this site should not be used as a substitute for competent legal advice from a licensed attorney that practices in your state. The law changes frequently and varies from state to state. If I refer to your state's laws, you should not rely on what I say; I just did a quick Internet search and found something that looked relevant that I hoped you would find helpful. You should verify and confirm any information provided with an attorney licensed in your state.
Mr Frederick offers sound advice. Basically, when a person dies a final income tax return for the last year of his life must be filed. IThe estate then must file for the period commenc ing after his death if they receive over $600. The estate/trust in this case can file on a calendar or fiscal year basis. Another reason to file a return is if expenses exceed income in the final year of an estate.
Get with an estaetes/tax attorney to get specific advice.
LEGAL DISCLAIMER Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia and Montgomery Counties. He is authorized to handle IRS matters throughout the United States. His phone number is 215-735-2336 or his email address is email@example.com , his website is www.sjfpc.com. and his blog is <http://frommtaxes.wordpress.com/> Mr. Fromm is ethically required to state that the response herein is not legal advice and does not create an attorney/ client relationship. Also, there are no recognized legal specialties under Pennsylvania law. Any references to a trust, estate or tax lawyer refer only to the fact that Mr. Fromm limits his practice to these areas of the law. These responses are only in the form of legal education and are intended to only provide general information about the matter within the question. Oftentimes the question does not include significant and important facts and timelines that if known could significantly change the reply or make such reply unsuitable. Mr. Fromm strongly advises the questioner to confer with an attorney in their state in order to ensure proper advice is received. By using this site you understand and agree that there is no attorney client relationship or confidentiality between you and the attorney responding. This site should not be used as a substitute for competent legal advice from a licensed attorney that practices in the subject area in your jurisdiction, who is familiar with your specific facts and all of the circumstances and with whom you have an attorney client relationship. The law changes frequently and varies from jurisdiction to jurisdiction. The information and materials provided are general in nature, and may not apply to a specific factual or legal circumstance described in the question or omitted from the question. Circular 230 Disclaimer - Any information in this comment may not be used to eliminate or reduce penalties by the IRS or any other governmental agency.
My colleagues have provided you with sound advice. You will need to file a final tax return for your stepfather. Then, you'll need to obtain a new tax ID for the trust. It is always a good idea to file a return for the trust, even if there is no income, to avoid the IRS coming back to you later.
When responding to questions posted on Avvo, I provide a general purpose response based on California law as I am licensed in California. In reviewing my response, you are specifically advised that your use of, or reliance upon any response I provide is not advisable. I do not have all relevant background details or facts related to your issue / matter, thus I am not in a position to give you legal advice. Further, your review, use of, or reliance upon my response does not establish an attorney-client relationship between us nor does it qualify as a legal consultation for any purpose. For specific advice regarding your particular circumstances, you should consult and retain local counsel.