Does A Life Insurance Trust File A Tax Return?

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   Peggy Mace

   Most of the U.S.

   As a Grantor Trust, the income is reported on the grantor's individual income tax return, so the Irrevocable Life Insurance Trust does not usually need to file a tax return. If there is no income in the policy, you may need to write an initial note to the IRS stating that. If income is over $600/year, you may need to use Form 1041 to file a tax return for that year. Contact your tax consultant to get the final word on this.

   Answered on July 21, 2013

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