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For more information on Grantor Type Trusts, refer to the IRS Instructions for Form 1041 and Schedules A, B, G, J, and K-1, 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 Trusts, later, under Special Reporting Instructions.

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.

To check the Grantor Type Trust box within TaxAct:

  1. From within your TaxAct return (Online or Desktop), click Basic Info to expand, then click Estate Info. On smaller devices, click in the upper left-hand corner, then click Basic Info.
  2. Check Grantor type trust, then click Continue.
  3. On the screen titled Grantor Trusts Information, click Edit to enter information on a worksheet similar to a Grantor Letter to complete, then click Save & Close.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.


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