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Asked 4/15/2010

How do we file a 1041 for a special needs trust with a tax free annuity?

My 33 year-old daughter was given a tax-free annuity from the government. Last year we set up a special needs trust for the annuity and we were told that we had to file a 1041. How do we list that on the form so that the IRS realizes that this is a tax free income?

 
 
 
 
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Answer 1/1 - Submitted 4/16/2010

I'd have to see what reporting documents you've received before giving advice on this one. You might want to take them to a tax preparer who handles trust returns (not all do) and specifically find one that has encountered special needs trusts (which are still kind of rare).

 
 
 
 
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