filing Taxes/ NFA Trust

[Roger Ronas]

Quick question, Does an NFA Trust have to file any taxes?
Thanks
Roger

[Circuits]

Did said trust have any taxable income?

[Roger Ronas]

No, so are you saying it only has to file if it has taxable income/
Thanks
Roger



Did said trust have any taxable income?

[NFATrustGuy]

An NFA Trust is a specialized version of a "Living Trust" (or more technically an "inter vivos trust"). The Trust is what the IRS calls a disregarded entity. IF the Trust has any income, it's reported under the name and social security number of the person who initiated the Trust. This is logical because the person who initiated the Trust is also the person who manages the Trust's assets AND the person who is allowed to benefit from the Trust's assets for as long as he's alive.

When the original maker of the Trust dies, the Trust will need to obtain an EIN from the IRS. An EIN is basically a social security number for a non-person (corporation, LLC, Trust). Even with the EIN, however, the Trust doesn't file unless it has income.

Sometimes it helps to think of this stuff in terms of the common Living Trust as an estate planning tool... The Trust owns what would normally be YOUR stuff. The Trust has a bank account... The bank will want a social security number so they can report the account's 0.005% interest income. While you're alive, this income is reported under your SS#. After you die, the Trust gets its own tax ID # (called an EIN). Then... If the Trust makes any income after you're dead, the Trust would have to file a tax return.

Of course if you've managed to figure out how to make money by buying NFA stuff, you're obviously a genius and probably know all of this stuff anyway. My standard tax discussion disclaimer applies: I know just enough about taxes to know when it's time to get a tax professional involved. If your Trust is somehow making money, please consult with somebody who specializes in taxes--not an attorney or a message board!

[Roger Ronas]

Thank you.
I would assume that if I or my heirs sold an NFA item, there would be no income unless it was sold for more than purchase price?

Roger

[Great-Kazoo]

Thank you.
I would assume that if I or my heirs sold an NFA item, there would be no income unless it was sold for more than purchase price?

Roger

Roger, use common sense when dealing with a NFA Trust. No One is in it to make money / profit. IF anything the NFA item (UNLESS) it's a machine gun / select fire, looses money since it's used. Does anyone actually declare a profit on small sales items EXCEPT if it's run through their business?
When one sells an item on CL or at their garage sale, do you submit any monies received as income?

[Hoser]

Thank you.
I would assume that if I or my heirs sold an NFA item, there would be no income unless it was sold for more than purchase price?

Roger

When I die they will need a lawyer anyway. They can ask him.

[Roger Ronas]

Understood, just trying to think of everything so when I die, my heirs aren't left in the dark.



Roger, use common sense when dealing with a NFA Trust. No One is in it to make money / profit. IF anything the NFA item (UNLESS) it's a machine gun / select fir,. looses money since it's used. Does anyone actually declare a profit on small sales items EXCEPT if it's run through their business?
When one sells an item on CL or at their garage sale, do you submit any monies received as income?