We have an Irrevocable trust with our 2 children as trustees. Last year the trust sold our house and bought a new one. To do this we had to get an EIN number. Do we or our children have to file anything with the IRS concerning taxes, etc.?
1 Answer from Attorneys
Yes definitely. Think of an irrevocable trust as a separate tax payer somewhat like a corporation, but not exactly. Anyway, yes the trust needs to file a tax return. Although an accountant is going to charge money for preparing the tax return, it’s something that you want to do anyway in order to keep your i’s dotted and T’s crossed so that the purpose you set up the irrevocable trust is not challenged because you ignored the legal formalities of trust administration. It’s really the trustees that are on the hook for doing this.