THE REVERE ADVOCATE – FRIDAY, JANUARY 23, 2026 Page 5 TRUST INCOME TAX RETURNS FOR 2025 TAX YEAR F or this upcoming tax season, whether you have previously executed a revocable trust or irrevocable trust, it is important to know the Trust income tax return fi ling requirements. If you have executed a revocable Trust, it will be treated as a grantor-type Trust and therefore no separate tax return will be required to be fi led for the Trust. If you were to open a stock brokerage account or money market account in the name of such a trust, for example, you can have the bank or fi - nancial institution simply use your social security number for IRS 1099 reporting purposes. Upon your death as the Settlor of such a revocable Trust, the Trust would then become irrevocable and would no longer be classifi ed as a grantor-type trust. In such an event, if the Trust generates income, whether interest, dividend, capital gain income, or net rental income from rental real estate, then a separate Trust tax return would need to be fi led. Furthermore, the Trustee would have to fi le for a federal ID number for the Trust with the IRS. If the Trust does not distribute its income, it will have to pay taxes at the Trust level. The highest tax bracket for Trusts of 37 percent starts at only $15,650 in taxable income. Therefore, it is often more desirable to distribute the income to the income benefi ciaries in order to claim an inGerry D’Ambrosio Attorney-at-Law Is Your Estate in Order? Do you have an update Will, Health Care Proxy or Power of Attorney? If Not, Please Call for a Free Consultation. 14 Proctor Avenue, Revere (781) 284-5657 come distribution deduction at the Trust level to zero out the Trust’s taxable income. The income will then be taxed to the income beneficiaries who actually receive the distribution on their individual income tax returns. For the 2025 calendar year, the 22 percent tax bracket for a married couple does not begin until taxable income reaches $96,950. The 37 percent tax bracket for the same couple does not begin until taxable income reaches $751,600. With a Medicaid irrevocable Trust executed for asset protection purposes, a tax return would have to be fi led by the Trust under its federal ID number in the event it generates taxable income. The Trust should be drafted in such a way as to be treated as a grantor-type Trust. If this Trust is generating taxable income, there would then be a grantor letter issued to the Settlor/Grantor/Trustor of the Trust in order for that person to report the items of income on his or her individual income tax return. There are several Trust provisions that would need to be included in the irrevocable Trust in order for it to be treated as a grantortype Trust for tax purposes. Since the irrevocable Trust is drafted to be treated as a grantor-type Trust, it does not matter if interest income, dividend income, capital gain income or net rental income is actually distributed to the Grantor. Those items of income will pass through to the Grantor of the Trust via the grantor letter and will be reported on his or her Form 1040. The Trust will not be paying the income taxes on the income it generates. Upon the death of the Settlor of the irrevocable Trust, the Trust will no longer be treated as a grantor-type Trust. Consequently, any net income generated by the Trust will be taxed at higher Trust income tax rates unless the net income is actually distributed to the income benefi ciaries or remainder benefi ciaries. For this upcoming tax season, be aware of the income tax rules pertaining to revocable and irrevocable Trusts when determining whether or not a tax return needs to be fi led, and if so, which type of Trust income tax return. Joseph D. Cataldo is an Estate Planning/Elder Law Attorney, Certifi ed Public Accountant, Certifi ed Financial Planner, AICPA Personal Financial Specialist and holds a Master’s Degree in Taxation. If We Happen To Meet By Accident ... You’ll Be Glad You Found Us! BEST! Celebrating 46 Years In Business! TONY’S AUTO BODY Call or Visit 781-321-0032 34 Sharon Street Malden, MA 02148 TONYSAUTOBODYLLC.COM COME VISIT OUR STATE OF THE ART BODY SHOP • Computerized Paint Matching (State of the Art Spray Booth) • Computerized Frame Machines • R134 + 1234yf A/C Machines Fully Insured -RS2415 Insurance Company Approval ALL OUR WORK IS GUARANTEED! TONY BARTOLO Owner 46 Years Let Us Handle Your Next Insurance Claim. Go With the BEST It Doesn’t Get BETTER! RENTAL CARS Available
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