Trust return; I don't do many of these...

[Burke]

Interesting.  I am inclined to throw my lot in with the group who is arguing constructive receipt.  What is not included in the details here is ....was the annuity the only asset to go into the Trust?  Was this something that was in an RLT, for instance, when the mother was living?  IMO, the Trust might have existed at death, but was not FUNDED until the monies went into the bank account, so that is the date the trust started for tax purposes.  Prior to that it had no income unless there is information we don't have here, and no tax would have been due.  However, as someone said above, if no distributions have been made YET, then the proceeds are reportable by the trust and taxes are due to be paid by it.  Electing Sect 663 would have only extended the date for distribution until 65 days after 2019.  DANVRAN asks what is the difference between reporting it in 2016 or 2019.  A heck of a lot of interest and penalties, that's what.   What is the reasoning for the funds not being disbursed at this point?  Are all these legal expenses incurred going to be paid and deducted by the trust?  Doesn't sound like there is going to be much left.   Also, it would be an interesting scenario if a Section 645 election could be made -- would have to have more details and a legal opinion -- but that would enable them to elect a fiscal year.......  There were no other details given about estate assets.   I would love to know the outcome of this situation.  Keep us informed.  

 

 

 

[DANRVAN]

11 hours ago, Burke said:

Also, it would be an interesting scenario if a Section 645 election could be made -- would have to have more details and a legal opinion

Way to late for 645 election. 

The election would have to be made for the due date of the initial short year beginning in the year of death, regardless of whether or not a return was required.

Why would you need a legal opinion?

 

11 hours ago, Burke said:

  DANVRAN asks what is the difference between reporting it in 2016 or 2019. 

 The point was how much interest and penalties would a request for abatement involve.

 

11 hours ago, Burke said:

IMO, the Trust might have existed at death, but was not FUNDED until the monies went into the bank account, so that is the date the trust started for tax purposes.

 If the trust received income by constructive receipt, then it had income for tax purposes.

[DANRVAN]

On 4/28/2020 at 2:44 PM, joanmcq said:

The trustees are also the beneficiaries, so I’m not expecting any issues there.

I don't see any reason to decline the engagement.