How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Lev Your Own Question
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29800
Experience:  Taxes, Immigration, Labor Relations
Type Your Tax Question Here...
Lev is online now
A new question is answered every 9 seconds

I have a55 year old son who is mentally challenged and has

Customer Question

I have a55 year old son who is mentally challenged and has seizures. He is in a special home in PA. They file his personal tax return. He has had small jobs at minimum wage for short periods of time. But he cannot keep a job due to his problems. I have kept his
funds liquid because I have had to use them for doctors' bills. This year he had brain
surgery (taking 3 hours). He is on SSDI. So he has had no income personally for a
number of years and the trust only made $66.00 last year. I am trying to keep very
careful records for myself and the trust. But I understand the trust does not have to
file a tax return if it does not earn$600 or more in the year. I have not sent in the
Form 1041 as his trust owes nothing and is owed nothing. I could just keep a copy with previous Tax returns. I am a widow - 85 years old. So I cannot help monetarily. Thank you in advance for any help you can give me. Junexxxxxxxxxxx I am going to the mailbox and be right back.
Submitted: 2 years ago.
Category: Tax
Expert:  Lev replied 2 years ago.
I assume that is an irrevocable trust.We need to verify filing requirements for the trustsee page 4 fiduciary (or one of the joint fiduciaries) must file Form 1041 for a domestic trust taxable under section 641 that has:1. Any taxable income for the tax year,2. Gross income of $600 or more (regardless of taxable income), or3. A beneficiary who is a nonresident alien.So far - the tax return is required based on your information. But there is NO income tax liability.
Expert:  Lane replied 2 years ago.
Hello Ms. Raymond.
I am a different expert and have a different answer.
If the only income the trust earned was $66 then the exemption for the trust, ...
$300 for a simple trust,
$100 for a complex trust or
$3,950 for a qualified disability trust
... would (even at the lowest level of $100) take the trust's TAXABLE income income on line 22 of the trusts tax return, down to a negative number...
Hence, because the trust has no TAXABLE income, there is NO need to file a 1041 trust return for this year.
PLease let me know if you have any questions at all.
Expert:  Lev replied 2 years ago.
When the trust has ANY taxable income for the tax year - the tax return is required.That is regardless if there is any tax liability on THAT tax return.The statement - that when there is no taxable income and there is no tax liability - the tax return is not required - is not correct.