Ss-4 Instructions For Irrevocable Trust
Trine Gritz
APRIL 16, 2012 VOLUME 19 NUMBER 15
Tax ID numbers for trusts. When we first wrote about this topic, we did not appreciate how interested our readers would be. We thought that the issue was sort of dry, actually, and that most people would have asked their lawyer or their accountant for direction. It has become one of the most enduringly popular topics at the Fleming & Curti, PLC, website.
The most common scenario is this: husband and wife have either a joint revocable trust or reciprocal trusts. In either case, upon the death of the first spouse a separate trust is created for the benefit of the surviving spouse. This trust is irrevocable and contains assets that belonged originally to the now-deceased spouse. As we have described before, this new trust (it might be more accurate to call it a modification of the old trust, which is now irrevocable) needs its own EIN. But what is it called?
My mother passed away 13 years ago. She had a simple declaration of trust of she as the grantor. She left very little to inherit and we were unaware that we as the trustees needed to file a final tax return for her. We now find that she has several thousand dollars in unclaimed gas and oil rights. We are told we need a FIEN or EIN number to stake the claim. My question is: If we need to apply for a number will we be able to get one even though her death was 13 years ago? Also will there be a big problem because we did not file a final tax return? Thank you
My parents set up a Revocable Living trust, but both have passed away within 2 years of each other. I am not finding that an EIN was ever requested. I am designated as the successor trustee. Should I be requesting an EIN?
A number is provided for IRS contact in the EIN Gov web site. The IRS contact that I spoke to indicated that the Trustor in the original trust is the Responsible Party once the Trustor is deceased and the trust becomes irrevocable. If you identify the trustee as the Responsible Party, you will be declaring that the Trustee has an irrevocable trust, and you will be creating
a taxpayer id for his own personal taxes. In addition, I was told that you need to give the deceased date for the date when trust was funded (not the date of the original trust), since the IRS is interested in the date the trust became irrevocable for trust taxes. If you provide the original date of the trust, you will be expected to create trust taxes starting at a much earlier date.
After the death of the grantor, revocable trusts require an EIN. Successor trustees can apply for the tax ID number for the trust after assuming trustee duties. The tax ID helps to report all trust-related financial details after the death of the grantor. You can get the tax ID number for trust by lodging an application on the IRS website.
After the death of a grantor, it becomes essential that an irrevocable trust obtain an Employer Identification Number (EIN). An EIN allows trustees to accurately manage and report post-death transactions; so promptly complete Form SS-4 available online from the IRS website in order to apply for it.
After the grantor has passed on, obtaining an Employer Identification Number (EIN) for an irrevocable trust is imperative for managing financial affairs and reporting purposes. To achieve this objective, filling out Form SS-4 on the IRS website as quickly as possible ensures all trust transactions are recorded under its new EIN number.
The Trustee should keep an irrevocable trust tax compliant. If the trust makes an annual income exceeding $600, the Trustee should file federal income taxes for the trust, and to do that, they need the irrevocable trust tax id number. The tax ID number or EIN works like the SSN for the trust.
Here at Hess-Verdon, we counsel clients on various aspects of estate disputes, such as investigating potential claims, evaluating the merits of bringing a claim, filing or defending a claim, and when necessary litigating a claim through trial or settlement.
With our expert team of trust litigators, in many instances, we can settle such proceedings without going to trial after taking into account the merits of the positions advanced by the respective parties and the tax rules applicable.
Rest assured, the Hess-Verdon team is here to help you. Unlike some other law firms, we are a full-service firm. Handling thousands of probate and trust litigation cases helps us know exactly which steps are crucial for your case.
Form IT-205-I provides instructions to assist a fiduciary of a New York State resident estate or trust with filing form IT-205. When we refer to you throughout these instructions, it means you, as fiduciary.
If you were a New York State resident estate, or resident or part-year resident trust and you used federal Form 4972, Tax on Lump-Sum Distributions, to calculate your federal tax on lump-sum distributions, you must use New York State Form IT-230, Separate Tax on Lump-Sum Distributions, to compute your New York State separate tax on lump-sum distributions. (See Form IT-230-I, Instructions for Form IT-230.)
If you are the fiduciary of a New York City resident estate or trust and you are required to file a New York State fiduciary return, you must report New York City income tax liability on your New York State return. The New York City income tax liability is based on the same taxable income as for New York State tax purposes. See the instructions for New York City and Yonkers fiduciary taxes.
If you are the fiduciary of a Yonkers resident estate or trust and you are required to file a New York State return, you must report the Yonkers income tax liability on your New York State return. The Yonkers tax liability is based upon the New York State tax liability. See the instructions for New York City and Yonkers fiduciary taxes.
If you are the fiduciary of a Yonkers nonresident estate or trust that has income from wages earned or net earnings from self-employment in Yonkers, you must complete Form Y-206, Yonkers Nonresident Fiduciary Earnings Tax Return, and submit it with your New York State fiduciary return, Form IT-205.
If the person whose property constitutes a revocable trust changes their domicile to or from New York State between the time of transfer of the property to the trust and the time it becomes irrevocable, the residence of the trust will be deemed to have been changed at the date the trust ceases to be revocable. In that case, you must file Form IT-205-A for the tax year in which the change of status of the trust occurs.
If the estate or trust is a recipient of a lump-sum distribution from a qualified retirement plan, calculate this separate tax on the ordinary income portion using the New York forward averaging method on Form IT-230. For more information, see Form IT-230-I, Instructions for Form IT-230.
Use Form IT-1099-R to report New York State, New York City, or Yonkers tax withheld from annuities, pensions, retirement pay, or IRA payments. For more information, see the instructions on Form IT-1099-R.
The executor, administrator, or other representative of a taxpayer who died during the tax year must file a personal income tax return for the deceased individual. Use the form that would have been appropriate had the taxpayer lived. (See New York State tax returns for individuals above for requirements for filing.)
A trust that, by reason of its purposes or activities, is exempt from federal income tax is exempt from tax under Article 22 (regardless of whether it is subject to federal and state income tax on unrelated business taxable income).
If you are not required to electronically file your extension request, you may file Form IT-370-PF, Application for Automatic Extension of Time to File for Partnerships and Fiduciaries.
If the estate or trust requests an extension and pays any tax the estate or trust owes on or before the due date of the return, the Tax Department will automatically extend the time to file by five and one-half months.
You must e-file if your software allows you to e-file your return, or if you are a tax preparer who is subject to the e-file mandate. E-file is easy, safe, and allows you to get your refund faster. Most New York taxpayers e-file.
Most fiduciaries are required to make estimated tax payments electronically. You can make your payment directly on our website or use approved tax preparation software. See Make an estimated income tax payment or visit www.tax.ny.gov (search: estimated).
If you are not required to pay electronically, use Form IT-2106, Estimated Income Tax Payment Voucher for Fiduciaries, and Form IT-2106-I, Instructions for Form IT-2106, to determine and pay any amount of estimated tax required.
Enter the daytime telephone number including the area code. This entry will enable the Tax Department to correct minor errors or omissions by calling rather than writing or sending back the return.
If you mark the Yes box, you are authorizing the Tax Department to discuss with the designee any questions related to this return. You are also authorizing the designee to give and receive confidential taxpayer information relating to:
You are not authorizing the designee to receive your refund, bind you to anything (including any additional tax liability), or otherwise represent you before the Tax Department. If you want someone to represent you or perform services for you beyond the scope of the third-party designee, you must designate the person using a power of attorney (for example, Form POA-1, Power of Attorney).
When completing this section, enter your New York tax preparer registration identification number (NYTPRIN) if you are required to have one. If you are not required to have a NYTPRIN, enter in the NYTPRIN excl. code box one of the specified 2-digit codes listed below that indicates why you are exempt from the registration requirement. You must enter a NYTPRIN or an exclusion code. Also, you must enter your federal preparer tax identification number (PTIN) if you have one; if not, you must enter your Social Security number.
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