Estates and trusts | FTB.ca.gov (2024)

Overview

An estate is all the property a person owns (money, car, house, etc.). When a person passes away, their estate may be taxed. Estates generally have the following basic elements:

Decedent
Administrator of the estate (executor)
Person who may receive property or income from the estate (beneficiary)
Property

A trust is an agreement to hold and administer property, typically in a written document in which someone (a trustee) is responsible for managing property for someone else (beneficiary). Property can include:

Filing requirements

Estates

The executor may have to file a return if the estate meets any of these:

The decedent was a California resident at the time of death
Gross income is over $10,000
Net income is over $1,000
The estate has income from a California source
Income is distributed to a beneficiary

Trusts

The trustee may have to file a return if the trust meets any of these:

The trustee or beneficiary (non-contingent) is a California resident
The trust has income from a California source
Income is distributed to a California resident beneficiary

And the trust has:

Gross income is over $10,000
Net income is over $100

What form to file

File Form 541 in order to:

Report income received by an estate or trust
Report income distributed to beneficiaries
File an amended return for the estate or trust
Claim withholding

Tax forms

Visit Forms to get older forms.

Due dates and mailing addresses

Estates

When filing an estate return, the executor follows the due dates for estates.

Trusts

When filing a trust return, the trustee follows the due dates for individuals.

Estimate payments

Your estate or trust may be required to make estimate payments. Visit Estimated Tax for Fiduciaries instructions (Form 541-ES) for more information.

Prompt audit request

Under California Revenue and Taxation Code (R&TC) Section 19517, fiduciaries may request an 18-month statute of limitations instead of the normal four years after filing:

A decedent’s individual tax return.
An estate tax return.
A trust tax return.

The request must be in writing by submitting IRS Form 4810, Request for Prompt Assessment Under Internal Revenue Code Section 6501(d), or with a letter. The requester must clearly indicate that a request for a prompt assessment under R&TC Section 19517 is being made and give the tax years involved.

To submit this request, gather:

A copy of the completed tax return.
A letter requesting a prompt assessment.

Mail these items to:: Attn: Estates and Trusts Audit Unit; MS: F-320
Franchise Tax Board
PO Box 1673
Sacramento CA 95812-1673

You may find it helpful to review your tax account (balance, debts).

Connect with us

Online: Log in to MyFTB
Phone: 800-852-5711; 916-845-6500 (outside the US)

As an expert in tax and estate planning, I bring a wealth of knowledge and experience to guide you through the intricate details of managing estates and trusts. With a comprehensive understanding of the legal and financial aspects, I can provide insights backed by practical expertise.

Now, let's delve into the concepts covered in the provided article:

Estate Overview:
- An estate comprises all the assets a person owns at the time of their death, including money, cars, houses, etc.
- When an individual passes away, their estate may be subject to taxation.
- Key elements of an estate include the decedent, the administrator (executor) of the estate, and the beneficiary who may receive property or income from the estate.
Trust Overview:
- A trust is a legal agreement to manage and administer property for the benefit of someone else.
- In a trust, the key players are the creator of the trust (trustor/grantor), the manager (trustee or fiduciary), and the beneficiary who will receive property from the trust.
- Property in a trust can include money, cars, houses, and other assets.
Filing Requirements for Estates:
- The executor of an estate may need to file a return if the estate meets certain criteria, such as the decedent being a California resident, gross income exceeding $10,000, net income exceeding $1,000, or having income from a California source.
- The filing is also required if income is distributed to a beneficiary.
Filing Requirements for Trusts:
- The trustee of a trust may have to file a return if the trust meets specific conditions, such as having a California resident as a trustee or non-contingent beneficiary, income from a California source, and gross income over $10,000 or net income over $100.
Form to File:
- Form 541 is used to report income received by an estate or trust, report income distributed to beneficiaries, file an amended return, and claim withholding.
Tax Forms:
- Specific tax forms mentioned are the California Fiduciary Income Tax Return form (FTB 541) and the California Fiduciary Income Tax Return booklet (FTB 541 BK).
Due Dates and Mailing Addresses:
- Estates and trusts have specific due dates for filing, and the executor or trustee must follow these dates based on whether they are filing for an estate or trust.
Estimate Payments:
- Estates or trusts may be required to make estimate payments, and relevant information can be found in the Estimated Tax for Fiduciaries instructions (Form 541-ES).
Prompt Audit Request:
- Fiduciaries, under California Revenue and Taxation Code Section 19517, may request an 18-month statute of limitations for audits related to individual tax returns, estate tax returns, or trust tax returns.
Connect with Tax Authorities:
- Various methods are provided for individuals to connect with tax authorities, including online portals, phone numbers (both domestic and international), and mailing addresses for specific units.

Armed with this understanding, you can navigate the complexities of estate and trust taxation, ensuring compliance with relevant regulations and optimizing financial outcomes.