Do I Need a Tax Identification Number When Selling
San Diego Real Estate in Probate or a Trust?
The simple answer is “yes”, a tax identification number or EIN is necessary when acting as a San Diego executor, administrator or San Diego trustee.
During the decedent’s life, the trust is typically revocable and taxes are paid by the grantor as an individual using the grantor’s SSN (social security number). When the grantor passes away, the living trust then becomes irrevocable and the San Diego successor trustee will pay the decedent’s taxes via an EIN instead of the SSN. In the case that a trust was not completed, then the San Diego executor or administrator through San Diego probate will also need an EIN when representing the estate. That’s the way the IRS can be certain that any taxes owed by the decedent are collected.
Once the trust becomes irrevocable or the San Diego probate court has appointed the executor or administrator then a separate tax identification number must be obtained from the IRS. The San Diego trustee, executor or administrator will complete IRS form SS-4 and submit it to the IRS for approval. Once approved the San Diego trust or San Diego probate will be assigned an EIN. The EIN will then be used in lieu of the decedent’s social security number for the San Diego trust or San Diego probate assets and for tax reporting purposes.
The only scenario that a new tax ID number is not necessary is in the case that the trustee is also the surviving spouse and all assets have been left to the surviving spouse. When that is the case, the surviving spouse may use their own SSN for tax reporting purposes.
As the San Diego executor, administrator or trustee you’ll need the EIN to open a bank or brokerage account for the estate because all financial institutions use the EIN to report the interest earned on any of the accounts until the funds are distributed to the beneficiaries.
Okay, so how to apply for an EIN?
The most convenient way to apply is through the IRS website at www.irs.gov. It’s not a difficult process, a San Diego trustee, San Diego executor or administrator can complete the online version of the request or print out the IRS form SS-4 application form and complete by hand.
My team and I have a purpose of helping our clients press the easy button. We’ve helped our clients obtain an EIN, and we can help you too!