Accepted Answer

OK, so you are saying that since your parents passing, the trust had no income at all in an investment account? No interest, dividends, capital gains?

This is not like when you just have an estate and are distributing all the assets to the heirs. This is a trust. When you distribute funds to the beneficiaries, you will need to issue them a Schedule K-1. This form will need to have an EIN. Upon your parents' passing, their living trust that was revocable became irrevocable and you as a trustee might be required to file a trust's income tax return and issue the Schedule K-1's to the beneficiaries. So it would be best to get an EIN since the trust changed from revocable to irrevocable.

In order for the trust to perform financial operations, the trust should have an EIN. You as a trustee would apply for the tax ID. As the trust is a legal entity, it may be required to file a trust income tax return and report taxable income and might either pay its own taxes or distribute taxable income to beneficiaries.

In most situations, upon the death, all assets are distributed from the trust and final income tax return for the trust is filled.

 

If you use the online EIN application as I mentioned before, you can get an EIN within minutes!

 

Please see additional information, see IRS publication 559 - http://www.irs.gov/pub/irs-pdf/p559.pdf

 

Let me know if you have any questions.

 

Expert:	JK_CPA
Pos. Feedback:	100.0 %
Accepts:
Answered:	11/4/2009

Certified Public Accountant (CPA)

with 5 years Accounting and 18 years tax experience.