IRS issues final rules on grantor-trust reporting

Article Abstract:

Final Regulations offer two alternative approaches for making reports for trusts deemed fully owned by the grantor under Sec. 671 aside from filing a Form 1041 with an attached statement. In the first option, the trustee does not submit any return with the IRS but files the name and taxpayer identification number (PIN) of the grantor, and the address of the trust to all payors. This trustee also provides the grantor with information allowing the grantor to incorporate the trust's items on the return of the grantor. Individuals using this method gets a complete Form W-9 from the grantor. In the second approach, the trustee submits the name, TIN and address of the trust to all payors, and furnish Forms 1099 to the IRS. These forms should show the income and gross proceeds received by the trust, and indicate that the grantor is the payee. The trustee supplies the grantor with information needed to incorporate the trust's items on the return of the grantor.

Trusts and trustees, Trustees, Trusts (Law), Grantor trusts

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Estate can be ended by IRS if it continues too long

Article Abstract:

The IRS has the authority to close an estate if its administrator or executor fails to perform the ordinary duties of administration within a reasonable period of time. These ordinary duties will be considered fulfilled if net assets have already been collected, if claims and litigation have been settled, and if debts, taxes, legacies and bequests have been paid. No recognition of an estate for tax purposes will be made if the estate is kept open specifically to avoid taxes or to further the beneficiaries' other business interests. The administration of an estate, however, will not be considered unneccesarily prolonged if it has been deemed that the administrators or executiors have been diligent in attempting to complete their ordinary duties. Likewise, estate administration will not be viewed as unduly prolonged if the estate remains open specifically to delay payment of estate tax through the retention of S corporation stock.

Finance, taxation, & monetary policy, Methods, Powers and duties, United States. Internal Revenue Service, Executors and administrators, Executors

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