Living Trust

[ILLMAS]

I just received a call from one of my client letting me know he wants to do his tax return different because he put his properties in a living trust. I don't prepare trust returns, so I wanted to see if someone can enlighten me on this matter.

Thanks

MAS

[jklcpa]

If this is a revocable trust with either the taxpayer or spouse as the trustee, then he has retained control over the assets and will continue to report the income from the trust assets on his personal return and no gift tax return for the transfer of assets into the trust is required. It's different if the trust is irrevocable or if someone other than the taxpayer or spouse is the trustee.

[Terry D EA]

Are you going to prepare the trust return? If so, ask for the trust instrument and read it before you begin completing the trust tax return. In most cases the trust instrument will give you the taxation of the trust.