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strongsilence
Level 10
April 8, 2026

Bypass trust and fiscal year

  • April 8, 2026
  • 1 reply
  • 13 views

I'm still not understanding so please opine. Is anything incorrect in the following?

Taxpayer sets up a bypass trust (long ago)

TP dies in 2025.

Bypass trust becomes irrevocable

and by definition the bypass trust is no longer a QRT (Qualified Revocable Trust)

Therefore, Bypass trust can elect fiscal year when it files the initial 1041...

and does NOT need to file Form 8855.

1 reply

sjrcpa
sjrcpa
Level 15
April 8, 2026

Trusts must have calendar years.

But, a qualified revocable trust can elect to be taxed as part of the estate. An estate can have a fiscal year.

Form 8855 is required.

The more I know the more I don’t know.
    S
    strongsilenceAuthor
    Level 10
    April 8, 2026

    ok. thank you. This trust is irrevocable.

    BobKamman
    BobKamman
    Level 15
    April 8, 2026

    It goes without saying that a qualified revocable trust becomes irrevocable when someone dies, and is therefore eligible to elect to be taxed as part of the estate and with a fiscal year.  But maybe @sjrcpa should have said it anyway. 

    I feel sorry for these people who paid a paper mill for an estate plan with a bypass trust back when the estate tax exclusion was $600K, and didn't amend it when they had a chance.  

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