kingfish02375[at]yahoo.com (Chuck) wrote:

- quote -

This "trust" does not sound like it was formed solely for
the purpose of protecting or conserving property.
Therefore, it is unlikely that it would be treated as a
"trust" for federal income tax purposes. If it is not
considered a trust, then it should not be filing a Form 941.
It seems much more likely that it would be a partnership
and it should be filing Form 1065, EVEN IF the legal
documents characterize the arrangement as a trust.

- quote -

I think that there would be some flexibility in determining
whether a new partnership/trust is formed in the second
year. You could probably argue either way.

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Here's an example of a Realty Trust, filing a 941:

The trust is in the business of buying individual
properties, renovating them, then selling them at a profit.
Assume one property a year for purposes of this example.

Example: First year, Trust has 3 investors at 33% apiece.
Second year, same 3 investors, 2 more added, total 5
investors at 20% apiece.

Does a separate trust need to be formed in the second year?

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