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For more information on Grantor Type Trusts, refer to the IRS instructions for Form 1041, U.S. Income Tax Return for Estates and Trusts.

Grantor Type Trusts

If all or any portion of a trust is a grantor type trust, then that trust or portion of a trust must follow the special reporting requirements discussed later, under Special Reporting Instructions. See Grantor Type Trust under Specific Instructions for more details on what makes a trust a grantor type trust.

In general, a grantor trust is ignored for income tax purposes and all of the income, deductions, etc., are treated as belonging directly to the grantor. This also applies to any portion of a trust that is treated as a grantor trust.

TaxAct offers a worksheet in Form 1041 Estate and Trust program to complete as a Grantor Letter. The box for Grantor Type Trust box on the Type of Entity screen must be checked in order to initiate the Grantor Letter worksheet.

  1. From within your TaxAct return (Online or Desktop), click Basic Info. On smaller devices, click the menu icon in the upper left-hand corner, then select Basic Info.
  2. Click on Estate Info
  3. Check the box "Grantor Type Trust"
  4. Click Continue until you reach the screen Grantor Trusts Information
  5. Click Statements - Federal Statements Worksheet or Review to enter information on the worksheet similar to a Grantor Letter to complete.

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