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Lev, Tax Advisor
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I live in Minnesota, have a cabin in Wisconsin. Want to leave

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I live in Minnesota, have a cabin in Wisconsin. Want to leave to daughter. If we use an irravocable trust, how difficult is it to do the taxes? Same question if we do a life estate? Thank You Tom Leach
Submitted: 5 years ago.
Category: Tax
Expert:  Lev replied 5 years ago.


Hi and welcome to Just Answer!

Irrevocable trust is a separate legal (and taxing ) entity - and has to file its own tax return. Here is the form to be used -

For filing requirements - see instructions - - for trusts - see page 4 - you must file the form 1041 if either the trust has any taxable income or gross income (not necessary taxable) $600 or more or a beneficiary is a non resident alien.

To evaluate complexity of preparing the income tax return for the trust - see page 35 where the IRS estimated required time – and possible overhead - just to prepare the form it might take in average a little more than 30 hours. Please be aware that not all tax preparers may do income tax returns for trusts.

Let me know if you need any help.


Thank you, XXXXX XXXXX this over with my wife and the person who will be running the trust if we go that way.


Take your time. Let me kno wif you need any calrification.


The trust will have no income other than the money necessary to pay the bills, approx. $1500.00 a year


According to you - the trust will not have TAXABLE income, but will have $1500 not taxable income - and tax return will be required.


What about doing taxes for a life estate?


"Life estate" is a form of ownership - it is not a legal entity - there is no special tax return "for life estate"

Lev and 2 other Tax Specialists are ready to help you

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