EIN, Trusts and Claiming... Rusty?

NattyBoh · Sep 24, 2014

I had a few questions that differed from my other thread, and hoping to pull in new eyes on my thread. Mainly because it goes a different route...

I had to get an EIN when I applied at M&T bank, which I did.

Here are my questions.

1. I used Jeremy Robinson ( Rusty ) to do my Trust. He told me that I should get an EIN to make my trust its own entity ( I believe ), which I did. Now I see that some people recommend to use my SS#.. Why?

2. I havent found any GOOD hard evidence that one would need to claim the trust on their taxes. If the trust never did any dealings with money for profit, buying, selling etc then why would one need to?

3. Does anyone else here use an EIN and claim on their taxes?

Any and all help into this is appreciated.

p.s. Also, I did some looking around online and found that some trusts have wording in the Trust that states all money made/profits will be paid by the Trustee ( me ) on my normal taxes/claims. Assuming that means that I would not need to file a separate form for the Trust, thus allowing me to roll it into my normal yearly tax claims.

anderson76 · Sep 24, 2014

It is likely that your gun trust is nothing more than a grantor revocable trust. For tax purposes, your trust is disregarded by the IRS. Just because you obtained an EIN for the trust does not mean that the trust is its own “entity”. File your taxes like you normally do. You don’t have to file anything for the trust.

On another note, you are wasting your time by maintaining a separate account for the trust. Doing so will not keep you out of jail or prevent the government or other people from taking your stuff. It is idiotic advice dished out by supposed gun trust experts.

rico903 · Sep 25, 2014

And your qualifications to be giving out trust and tax advice, are?

rico903 · Sep 25, 2014

NattyBoh said:
I had a few questions that differed from my other thread, and hoping to pull in new eyes on my thread. Mainly because it goes a different route...

I had to get an EIN when I applied at M&T bank, which I did.

Here are my questions.

1. I used Jeremy Robinson ( Rusty ) to do my Trust. He told me that I should get an EIN to make my trust its own entity ( I believe ), which I did. Now I see that some people recommend to use my SS#.. Why?

2. I havent found any GOOD hard evidence that one would need to claim the trust on their taxes. If the trust never did any dealings with money for profit, buying, selling etc then why would one need to?

3. Does anyone else here use an EIN and claim on their taxes?

Any and all help into this is appreciated.

p.s. Also, I did some looking around online and found that some trusts have wording in the Trust that states all money made/profits will be paid by the Trustee ( me ) on my normal taxes/claims. Assuming that means that I would not need to file a separate form for the Trust, thus allowing me to roll it into my normal yearly tax claims.

I opened mine at M&T and didn't have to get an EIN. Maybe just different managers have different opinions of what you have to do?

NattyBoh · Sep 25, 2014

Yeah it was weird. They were like okay everything is good. Then she left and came back saying I needed an EIN, so I had to go back home, get one, and return.

I read thru my trust and I don't see any wording that says it just rolls over into my normal taxes. As far as profits made etc ( but I don't see how I can file if nothing was earned or gained...right?)

Pinecone · Sep 25, 2014

When we did ours at M&T, we also had to do the EIN to open the account. It was a mandatory block they had to fill out to create the account.

It took about 1 minute online to get the EIN.

Pinecone · Sep 25, 2014

anderson76 said:
On another note, you are wasting your time by maintaining a separate account for the trust. Doing so will not keep you out of jail or prevent the government or other people from taking your stuff. It is idiotic advice dished out by supposed gun trust experts.

Funny, the attorneys that write the trusts recommend a separate account.

What is your "expertise" in the matter?

If I follow your advice and get into trouble, can I sue you for what it cost me to deal with the issue?

rob-cubed · Sep 25, 2014

Mine was with M&T too, no EIN required. Maybe it's a new requirement? I started mine a year and a half ago.

There's no requirement to report anything at the end of each year that I am aware of. The EIN is just there if you need it... paying taxes on any profits made would simply help protect it from any possible claims by the IRS. Which is unlikely, but a lawyer will advise you to play it safe. I think form 1041 is used for this purpose.

NattyBoh · Sep 25, 2014

Okay, but as you said.. It's not needed to claim if there was no money made. Right

anderson76 · Sep 25, 2014

rico903 said:
And your qualifications to be giving out trust and tax advice, are?

What makes me qualified? I know what I am talking about. On the tax question, you don’t have to take my word for it. The IRS provides a helpful Q&A on the topic of the taxation of trusts here:

http://www.irs.gov/Businesses/Small...ust-Tax-Evasion-Schemes-Questions-and-Answers
With respect to the tax treatment of grantor revocable trusts, it provides:

Q: What is a grantor trust?
A: "Grantor trust" is a term used in the Internal Revenue Code to describe any trust over which the grantor or other owner retains the power to control or direct the trust's income or assets. If a grantor retains certain powers over or benefits in a trust, the income of the trust will be taxed to the grantor, rather than to the trust. (Examples, the power to decide who receives income, the power to vote or to direct the vote of the stock held by the trust or to control the investment of the trust funds, the power to revoke the trust, etc.) All "revocable trusts" are by definition grantor trusts. An "irrevocable trust" can be treated as a grantor trust if any of the grantor trust definitions contained in Internal Code §§ 671, 673, 674, 675, 676, or 677 are met. If a trust is a grantor trust, then the grantor is treated as the owner of the assets, the trust is disregarded as a separate tax entity, and all income is taxed to the grantor.

Q: Do trusts have a requirement to file federal income tax returns?
A: Trusts must file a Form 1041, U.S. Income Tax Return for Estates and Trusts, for each taxable year where the trust has $600 in income or the trust has a non-resident alien as a beneficiary. However, if the trust is classified as a grantor trust, it is not required to file a Form 1041, provided that the individual grantor reports all items of income and allowable expenses on his own Form 1040, U.S. Individual Income Tax Return. Thus, the grantor/individual would pay the total tax liability upon the filing of his return for that taxable year.

Its funny. That tax issues that this sort of trust presents is kindergaten material. Yet you have a guy, who apparently went to gun trust expert, having to ask for tax advice on a gun forum.

rbird7282 · Sep 25, 2014

No EIN and no separate trust account.

Sent from my iPhone using Tapatalk

rob-cubed · Sep 25, 2014

Here is a good discussion on using an EIN vs SS with your revocable trust. These guys strongly recommend using SS except in very rare instances, though they are not focused on NFA trusts specifically:
http://issues.flemingandcurti.com/2009/08/17/do-you-need-a-new-tax-id-number-for-your-living-trust/

I'm assuming Rusty and others recommend an EIN because it separates its tax reporting from any of the individual trustees tax IDs.

The instructions on the 1041 read:

The fiduciary (or one of the joint fiduciaries) must file Form 1041 for a domestic trust taxable under section 641 that has:
1. Any taxable income for the tax year,
2. Gross income of $600 or more (regardless of taxable income), or
3. A beneficiary who is a nonresident alien.

If you don't sell anything at a profit which brings in more than $600, no worries about reporting it.

NattyBoh · Sep 25, 2014

Anderson.. That last comment was uncalled for.. Not sure if that was directed to me or not, but I'm just verifying. I was certain I didn't need to but I came across some conflicting info that got me thinking

anderson76 · Sep 25, 2014

NattyBoh said:
Anderson.. That last comment was uncalled for.. Not sure if that was directed to me or not, but I'm just verifying. I was certain I didn't need to but I came across some conflicting info that got me thinking

NattyBoh it was not my intention take a shot at you. That comment was directed at the guy you paid to draft your trust and give you advice. And it’s a fair comment to make.

anderson76 · Sep 25, 2014

rob-cubed said:
Here is a good discussion on using an EIN vs SS with your revocable trust. These guys strongly recommend using SS except in very rare instances, though they are not focused on NFA trusts specifically:
http://issues.flemingandcurti.com/2009/08/17/do-you-need-a-new-tax-id-number-for-your-living-trust/

I'm assuming Rusty and others recommend an EIN because it separates its tax reporting from any of the individual trustees tax IDs.

The instructions on the 1041 read:

If you don't sell anything at a profit which brings in more than $600, no worries about reporting it.

You don’t have to worry about the $600 amount because a grantor trust is not taxable under code section 641 (If you the grantor, have control of the trust property – then yes you have a grantor trust – and no the trust does not get taxed as a separate entity).

If you want to open a separate account for the trust then get an EIN. You do this because your bank is likely to require an EIN. Whether you obtain an EIN or not is not going to make any difference on the issues of (1) whether you have a valid trust, (2) whether the trust will be treated by as a separate taxable entity, and (3) whether you will be subjected to criminal liability under the NFA.

NateIU10 · Sep 25, 2014

I never understood the advise to get a trust account.

NattyBoh · Sep 25, 2014

The guy was rusty shalkeford off of here. He says I need to contact a CPA

Pinecone · Sep 25, 2014

anderson76 said:
What makes me qualified? I know what I am talking about. On the tax question, you don’t have to take my word for it. The IRS provides a helpful Q&A on the topic of the taxation of trusts here:

http://www.irs.gov/Businesses/Small...ust-Tax-Evasion-Schemes-Questions-and-Answers
With respect to the tax treatment of grantor revocable trusts, it provides:

Q: What is a grantor trust?
A: "Grantor trust" is a term used in the Internal Revenue Code to describe any trust over which the grantor or other owner retains the power to control or direct the trust's income or assets. If a grantor retains certain powers over or benefits in a trust, the income of the trust will be taxed to the grantor, rather than to the trust. (Examples, the power to decide who receives income, the power to vote or to direct the vote of the stock held by the trust or to control the investment of the trust funds, the power to revoke the trust, etc.) All "revocable trusts" are by definition grantor trusts. An "irrevocable trust" can be treated as a grantor trust if any of the grantor trust definitions contained in Internal Code §§ 671, 673, 674, 675, 676, or 677 are met. If a trust is a grantor trust, then the grantor is treated as the owner of the assets, the trust is disregarded as a separate tax entity, and all income is taxed to the grantor.

Q: Do trusts have a requirement to file federal income tax returns?
A: Trusts must file a Form 1041, U.S. Income Tax Return for Estates and Trusts, for each taxable year where the trust has $600 in income or the trust has a non-resident alien as a beneficiary. However, if the trust is classified as a grantor trust, it is not required to file a Form 1041, provided that the individual grantor reports all items of income and allowable expenses on his own Form 1040, U.S. Individual Income Tax Return. Thus, the grantor/individual would pay the total tax liability upon the filing of his return for that taxable year.

Its funny. That tax issues that this sort of trust presents is kindergaten material. Yet you have a guy, who apparently went to gun trust expert, having to ask for tax advice on a gun forum.

And how does any of that relate to not needing a separate bank account???????

Pinecone · Sep 25, 2014

rob-cubed said:
Here is a good discussion on using an EIN vs SS with your revocable trust. These guys strongly recommend using SS except in very rare instances, though they are not focused on NFA trusts specifically:
http://issues.flemingandcurti.com/2009/08/17/do-you-need-a-new-tax-id-number-for-your-living-trust/

I'm assuming Rusty and others recommend an EIN because it separates its tax reporting from any of the individual trustees tax IDs.

The instructions on the 1041 read:

If you don't sell anything at a profit which brings in more than $600, no worries about reporting it.

The question is, you are putting high dollar items into the trust. Is that "income" to the trust?

rob-cubed · Sep 25, 2014

Pinecone said:
The question is, you are putting high dollar items into the trust. Is that "income" to the trust?

That's a charitable donation to a worthy cause...

I have always wondered what qualifies as "taxable income" and would love to have that clarified by someone who understands. Particularly for those of us with trust bank accounts that earn interest, however small.

EIN, Trusts and Claiming... Rusty?

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