Navigating Tax Reporting for Your Trust

How will my Trust be taxed while I am living?

Your Trust is set up as a Grantor Trust, which is a type of Living Trust. This means it is active during your lifetime—the Grantor’s lifetime—rather than after your passing, and it is generally ignored for tax purposes.

As a result, any income generated by the Trust is taxed to the Grantor rather than to the Trust itself. The Trust is not considered a separate tax entity, and the income is treated as regular income for the Grantor.

In other words, there is no distinction for the Grantor when it comes time to report income for tax purposes. Any income generated by Grantor Trust assets is reported as personal income, just as it would have been prior to the Trust's creation.

Do I need a Taxpayer Identification Number for my Trust?

No, you do not need a TIN for your Trust. Since a Grantor Trust is disregarded for tax purposes, it does not require a separate Taxpayer Identification Number (TIN).

Instead, the Trust uses the social security number (SSN) of the Trust creator as its TIN. This means that for all income tax reporting related to the Trust, you'll use the SSN of the person who established it.

Which SSN Should We Use for a Joint Trust?

If the Trust is a joint one, such as those created by spouses, you can use either spouse's SSN. However, it’s important to be consistent in the social security number you choose for tax reporting purposes.