An identification number is required for many trusts. For example, after a death, an irrevocable trust may hold the assets of a decedent. The income and deductions are reported on an income tax return for the trust, and the beneficiaries’ shares of any income that is distributed or distributable are reported on Schedule K-1 for inclusion on the beneficiaries’ individual income tax returns. Since a separate income tax return is required for the trust, an identification number should be applied for in this situation.
For other trusts, no identification number is required. For example, revocable living trusts are a very popular estate planning technique. Since the person who creates the trust, called the grantor, has retained the power to revoke the trust, the trust is disregarded for income tax reporting. The income and deductions of the trust are reported on the income tax return of the grantor. Since a separate income tax return is not required for the trust, no identification number should
be applied for a revocable trust during the grantor’s lifetime.
The form for applying for an identification number for a trust is Form SS-4.
Since there are many different types of trusts, you should consult with a tax advisor to determine whether an identification number is required for the particular trust you are dealing with.
Thanks to Jim Carolan, Vice President Trust Advisor at Bank One, Flint, Michigan for suggesting that we expand our response on this issue.
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