Hi
I started using Land trusts to purchase property last year. I have been getting a little pushback from my title co. attorney and bank with regard to the Trust needing its own TIN. My understanding was that it is a pass through entity.
I’ve been using LeGrand’s doc, but it looks very similar to Bronchik’s as well in case you are familiar with those.
One issue on both is that they say that it is not a “business trust” , but when I look up the IRS Code Section 301.7701-4(b) , that’s what this looks like, and Bronchicks trust says this is not an ordinary trust which is Section 301.7701-4(a).
The business trust seems to be a pass through tax entity, where as the ordinary trust is not.
Anyone have any thoughts on this?
Having (or not) a TIN does nothing to change the character of the trust. If it keeps the title company happy, get one. Easier than getting a new title company.
Thanks Mark!
So if I get a TIN for a trust, I can still use as pass through and report the earnings on my LLC return (beneficiary) as opposed to doing a whole separate tax return for the new trust?
yep.
depending on what the trust is doing, you might “try” to get that TIN on your return somewhere just so the IRS computer can match it. Sch C, for example, has a TIN (EIN) field, if that’s an appropriate form for the trust’s income.