Taxpayer Identification Numbers

Frequently, there’s confusion regarding Taxpayer Identification Numbers. A Taxpayer Identification Number (“TIN”), is the number which is used to identify a taxpayer. For most individuals, it’s simply their social security number (“SSN”). For many businesses and trusts it’s an employer identification number (“EIN”). Here is a link for more information on TINs, including how to obtain one.

A trust has a TIN to use for tax reporting. Trusts can be either grantor trusts or nongrantor trusts. If a trust is a nongrantor trust, it must get its own separate EIN as its TIN. If a trust is a grantor trust, it may use the TIN of the grantor or a separate EIN as the TIN for the trust. For more information on trusts and their TIN and reporting, see Treasury Regulation §1.671-4. In the case of most individuals, their TIN is their SSN. A grantor trust is one over which the grantor has certain attributes, such as the right to income or certain other powers elaborated in sections 671-677 of the IRC. If the grantor is dead, a trust may be a grantor trust as to the beneficiary if the beneficiary has a general power of appointment over the trust, pursuant to section 678 of the IRC.

Thus, when at the inception of a revocable trust, it is a grantor trust as to the grantor and may use a separate EIN, but usually uses the grantor’s TIN, typically their SSN. When a trust becomes irrevocable, such as upon the death of the grantor, it will require a separate EIN. It may then split into several trusts for different beneficiaries. Those trusts will each require its own TIN. That TIN may be a separate EIN, or, if the trust is a grantor trust as to a beneficiary under section 678, it could use the beneficiary’s TIN (typically their SSN) as the TIN for the trust.

Who can help me with my estate planning?

Call today to schedule your complimentary estate planning consultation with Ed Matthews.

Ed Matthews is one of only a few attorneys in the state of Minnesota who is also a currently licensed Certified Public Accountant (CPA). Ed graduated summa cum laude from William Mitchell College of Law in 2003, where he served as Executive Editor of the Law Review.  He is a former Minnesota Supreme Court law clerk.  Perhaps, most importantly, he does not practice probate!  Instead, he has dedicated his life to helping Minnesota families avoid probate and protect their hard-earned assets.

To schedule a complimentary consultation with Ed Matthews, call (651) 501-5608.