My understanding is that the IRS treats a Trust as a business, in that it is / was income generating and required to file 1041's annually.
The history of my Mother�s Trust is that it first was in an Administrative Trust state with EIN starting with 27-, opened in 2010 and closed in 2012. The length of time it was an Admin Trust was due to the bereavement of our Father�s mourning the loss of his wife and our mother until his passing. He, may God rest his soul, passed away in March of 2012. The successor trustees, with the guidance of the Trust Attorney, began to properly manage the Trust per the instructions. The Family trust was then created (in 2012) with the EIN starting with 36-, which is currently open. When the Family trust was created, it was funded by the assets held in the 27- EIN.
Admin Trust � 27- EIN
Family Trust � 36- EIN
In 2010 the 27- EIN paid Fed taxes and State of WI taxes as our father lived in WI. (WI was paid an add. $22 in underpayment interest)
In 2011 the 27- EIN paid FED taxes and VA taxes as in Jan of 2011 our father moved to and lived in VA.
In 2012 the 27- EIN paid NO FED taxes and VA taxes, it also and had a $50,870 NOL due to civil litigation expenses. (A family member tried to steal the entire trust & father�s estate) The 1041 indicated it was a Final Return. The 36-EIN was created and funded by the 27- EIN.
In 2013 the 36- EIN had a $97,000 NOL due to civil litigation continued; changes to Father�s estate were reversed. This 36-EIN is no longer income producing and ready to close by filing an amended 2013.
COULD WE:
1. For the 27- EIN carry back the NOL and file form 1045 to receive a refund for taxes paid in 2011 and / or 2010?
2. Carry forward NOL, transferring it to EIN 36- since a majority of assets of 27- were moved to the 36- EIN? Some assets were kept in 27- to pay for expenses, the remainder was transferred to 36-.
3. Also can the 36- EIN carry forward NOL can be distributed to the sub-trusts that were created under it? A capital loss able to be distributed.
Any guidance you could provide to us would be greatly appreciated.
1 Answer from Attorneys
Suggest you talk to an attorney who handles Federal/VA taxation matters and estate/trust matters. Information will need to be assembled and carefully reviewed for a proper analysis. An experienced tax/estate/trust attorney in VA should be able to handle this type of matter and to protect the interests of the client. Please note that, in accordance with the VA Code of Professional Responsibility for Attorneys, a signed engagement letter is necessary in order to engage my legal services. If I can be of any help to you or people you know, contact me as I would be pleased to provide tax/legal support.
Sincerely,
Robert Beatson II, 6-14-2014, 11:35 p.m. EST
Law Offices of Robert Beatson II, 9818 Glynshire Way, Potomac, MD 20854
Email: [email protected]
Website: www.beatsonlaw.com
Practice areas: Tax, business law, computer/high tech/biotech law, intellectual property, trusts/estates/wills, real estate, litigation, mediation.
Licensed to practice law in: DC, MD, VA, and NY.
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