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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Use a partnership return. Posted by Ward-CA on May 23, 2003 at 8:34 AM In Reply to: How do trust income/losses get reported? posted by Erick on May 22, 2003 at 7:51 PM : I'll be setting our first trusts this year but want to make sure I know how to handle the taxes beforehand. How is the IRS informed about the income or losses that a trust is entitled to. For example, if a property is in a trust that has paper losses for tax purposes, how does this flow through to the beneficiary's 1040? : I believe that the beneficiary just reports it on his own 1040 (and sched E?). : Now, that's just if there is a single beneficiary. To make it a little more interesting, some of our properties that are in trusts have a 3 member LLC as the beneficiary. Does the trustee send give the LLC a 1099 or something like that? Does it matter whether or not the trust has it's own taxpayer ID? : Now, what if there are 3 different beneficiaries (as opposed to an LLC as the beneficiary)? Do all of these scenarios make sense? Are there different treatments for each?? : Thanks a lot. =•=•=•=•=•=•=•=•=•=•= Erick, A trust is exactly like a partnership, wherein all profits and losses flow through it like a conduit to the individual taxpayer/partners in proportion to their representative share of the overall owners’ interest. We actually file a limited partnership return for those trusts where we have outside investors involved. If we don’t have any outside investors involved on a particular property then we just report it on our personal income tax return. Follow Ups: Re: Use a partnership return. Erick 2:51 PM, 05/23/03 (1) You've got it (nt) Ward-CA- 8:44 PM, 05/23/03 (0) Post a Followup: Name : E-Mail : Subject : Comments: : : I'll be setting our first trusts this year but want to make sure I know how to handle the taxes beforehand. How is the IRS informed about the income or losses that a trust is entitled to. For example, if a property is in a trust that has paper losses for tax purposes, how does this flow through to the beneficiary's 1040? : : I believe that the beneficiary just reports it on his own 1040 (and sched E?). : : Now, that's just if there is a single beneficiary. To make it a little more interesting, some of our properties that are in trusts have a 3 member LLC as the beneficiary. Does the trustee send give the LLC a 1099 or something like that? Does it matter whether or not the trust has it's own taxpayer ID? : : Now, what if there are 3 different beneficiaries (as opposed to an LLC as the beneficiary)? Do all of these scenarios make sense? Are there different treatments for each?? : : Thanks a lot. : : =•=•=•=•=•=•=•=•=•=•= : Erick, : A trust is exactly like a partnership, wherein all profits and losses flow through it like a conduit to the individual taxpayer/partners in proportion to their representative share of the overall owners’ interest. : We actually file a limited partnership return for those trusts where we have outside investors involved. If we don’t have any outside investors involved on a particular property then we just report it on our personal income tax return. Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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