8/21/2023 0 Comments Ein look up illinoisThere are other ways to create a grantor trust, but that is the typical situation. In simplest terms, a trust is a grantor trust when all of the income is required to be paid to the grantor or grantors (the person that creates the trust). A grantor trust uses the social security number of the grantor. A trust that can be deemed a “grantor trust” does not need a separate EIN. When it comes to trusts and estates, the EIN is something as a misnomer since most trusts and estates are not actually employers in the typical sense of the word. Like a Social Security Number (SSN), an EIN is a unique nine-digit number, but instead of the 123-45-6789 format used for SSN’s, an EIN will always have a 12-3456789 format. But EIN’s are also used by corporations, partnerships and other business entities. For estate administration purposes, we’re usually talking about estates and non-grantor trusts. What is an EIN?Īn EIN is a 9-digit number assigned by the IRS to certain entities for tax reporting purposes. We’re all accustomed to providing our social security number to our employer, bank or brokerage institution so that income, dividends and capital gains can be reported to the individual and to the IRS.īut what happens when the income is not earned by a person, but instead is earned by an entity, such as a trust or estate? Generally speaking, trusts and estates are required to obtain and report income under a separately assigned tax identification number known as an “Employer Identification Number” (EIN). It probably won’t come as a surprise to anybody that income has to be reported on a Federal Income Tax Return.
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