[WSBAPT] Tax ID for RLT that became irrevocable

[Philip N. Jones]

I think we need a little bit more information.  Are there assets that will be in a probate estate?  Sounds as if there are none.  What are the terms of the trust?  Is it a credit shelter trust?  Is there a reason to use a fiscal year?  Depending on the terms of the trust, it should not be classified as an RLT, which normally does not get an EIN, although it might under some circumstances.  The 645 election can be made later, so there is no need for a decision now. The election is made on a Form 8855, which is due by the due date of the fiduciary income tax return.  See section 645(c).  So there is no rush.  Take a look at the regs under section 645 to make sure that your trust qualifies, particularly 1.645-1(f)(1).  If the election is made, it is irrevocable, but it is good for only two years.
There are lots of exceptions and conditions to these rules.  I suggest you find a CPA who is familiar with fiduciary income tax who will prepare these returns and the two of you can make this decision together.  Perhaps your client already has a CPA who is familiar with fiduciary income tax, but some are and some aren't.
Phil Jones
Portland, OR

Philip N. Jones |Duffy Kekel LLP
900 S.W. Fifth Ave., Suite 2500, Portland OR 97204
(503) 226-1371 (main) ) | (503) 226-3574 (fax)
(503) 853-1482 (cell)
pjones at duffykekel.com<mailto:pjones at duffykekel.com>



From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Krista MacLaren
Sent: Monday, August 10, 2020 9:39 AM
To: wsba probate & trust <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Tax ID for RLT that became irrevocable

Hi All -

I want to obtain an EIN for an RLT where one of the Trustors just died, so the trust is now irrevocable and will continue to exist until the surviving spouse dies.  On the IRS tool to obtain the EIN, I assume I choose RLT as the entity even though it is no longer revocable?  And can anyone offer an opinion as to whether to take the Section 645 election?  There should not be a probate, as there is only one asset which is a brokerage account payable to the trust.  The reading I did on the election suggested there may not be a down side of taking the election, but I am not sure.  Also, I am unclear why the online tool asks questions that I do not see on the SS-4.  Does anyone know why that is?

Thank you,

Krista J. MacLaren
Attorney at Law
Northgate Executive Center II
9725 3rd Ave NE, Suite 600
Seattle WA 98115
(206) 523-6116
kjm.inc at icloud.com<mailto:kjm.inc at icloud.com>

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