What is a 645 election for a trust?

The trustees of each qualified revocable trust (QRT) and the executor of the related estate, if any, use this form to make a section 645 election. This election allows a QRT to be treated and taxed (for income tax purposes) as part of its related estate during the election period.

When must a 645 election be made?

The IRC § 645 election is irrevocable once made. The election must be made on IRS Form 8855 (Election to Treat a Qualified Revocable Trust as Part of an Estate) by the due date, including extensions, of the estate’s initial income tax return.

How long does a section 645 election last?

However this benefit is only available if the decedent’s estate is required to file an estate tax return. If a trust is part of a taxable estate that is not required to file an estate tax return, the 645 election is only effective for two years from the date of death.

Why would I make a 645 election?

Well, a §645 election allows the executor of an estate and the trustee of a revocable trust to elect to treat the estate and the trust as one for tax purposes. Generally, estates have the ability to elect a fiscal year end or a calendar year end, whereas trusts default to a calendar year end.

Can you file a late 645 election?

For the election to be valid, the election form must be filed not later than the time prescribed under section 6072 for filing the Form 1041 for the first taxable year of the trust, taking into account the trustee’s election to treat the trust as an estate under section 645 (regardless of whether there is sufficient …

Can I file a late 645 election?

Can you make a 645 election without an estate?

Trust only: A qualified revocable trust making an IRC Sec. 645(a) election without an estate executor, or related estate, is still treated as an estate for IRC purposes while the election is in effect [Treas.

Can you make a 645 election if there is no estate?

645 election allows the trustee and the executor to effectively combine a QRT and an estate into one tax return, filed as an estate. Further, even if there is no separate probate estate, this election can be used to file the trust return (or several separate QRTs) as though the trust were an estate.

Can a section 645 election be made late?

Section 645(c) provides that the election to treat a QRT as part of the decedent’s estate shall be made not later than the time prescribed for filing the return of tax imposed for the first taxable year of the estate (determined with regard to extensions).

What is a Section 645 election?

The executor of A ‘s estate and the trustee of Trust, an electing trust, made a section 645 election. A Form 706 is not required to be filed as a result of A ‘s death.

How long does the 645 election period last?

The 645 election period does not continue indefinitely. The election termination date is based on a complex set of rules and differs on whether or not an estate tax return (Form 706) was filed. Upon election termination, the electing Trust will have to begin filing a separate income tax return.

Can a trustee appoint an executor after a 645 election?

Rules regarding the tax consequences of the appointment of an executor after a trustee has made a section 645 election believing that an executor would not be appointed for a related estate are in paragraph (g) of this section. (b) Definitions. For purposes of this section: (1) Qualified revocable trust.

How many 1041 forms do I need for a 645 election?

Only one Form 1041 (for the estate) is required if the § 645 election is made, even though legally, the trust, rather than the estate, continues to hold the assets. Certainly, the income and expenses of the estate continue to be reported by the estate on the estate’s income tax return.