Form 8855: Election to Treat a Revocable Trust as an Estate

Form 8855 is the IRS election that lets the executor of an estate and the trustee of a qualified revocable trust jointly treat the trust as part of the estate for federal income tax purposes. Once filed, the trust and estate report as a single entity on one Form 1041 for the length of the election period. The authority for the election is Internal Revenue Code Section 645, and the filing is attached to the first Form 1041 of the combined entity by its due date, including extensions.

The election is irrevocable, so it is worth understanding what you gain, what you sign up for, and when the window closes.

Why File the Election

The election unlocks several rules that ordinarily apply only to estates. For a trust that would otherwise file on its own, that access is the point.

A Fiscal Year Instead of a Calendar Year

Trusts must use a calendar year. Estates can choose any fiscal year-end, and an electing trust follows the estate’s choice.¹ A well-chosen fiscal year can shift income between tax years and smooth out the first post-death filings.

No Estimated Tax Payments for Two Years

Estates are exempt from estimated income tax payments for any taxable year ending within two years of the decedent’s death. That exemption can extend to certain grantor trusts under specific conditions.² A standalone trust would owe quarterly payments from the start; the combined entity does not, during the exemption window.

The Set-Aside Charitable Deduction

Estates and certain older trusts can deduct amounts permanently set aside for charitable purposes even before the money reaches the charity. Most trusts created after 1969 cannot, and are limited to amounts actually paid during the year.³ The election gives the trust access to the estate’s more generous rule.

The $25,000 Rental Real Estate Allowance

An estate can use the $25,000 active-participation rental loss allowance for taxable years ending within two years of death, based on the decedent’s active participation before death.⁴ Trusts on their own do not qualify because they are not natural persons. The election extends the allowance to the QRT during the election period.

Holding S Corporation Stock

An electing trust can hold S corporation stock during the election period without qualifying as an ESBT or QSST.⁵ That buys the fiduciary time to restructure ownership or make a QSST or ESBT election before the period closes.

Who Signs the Form

Both the executor of the estate and the trustee of the QRT must agree to the election and sign Form 8855 under penalties of perjury. If multiple executors or multiple trustees exist, only one of each needs to sign, unless local law or the governing document says otherwise.⁶

When no executor has been appointed through probate, the election can still be made. In that case, the trustee is treated as the executor for purposes of Section 645.¹ The trustee then files Form 8855 and the combined Form 1041 under the trust’s name and EIN. This is common when the decedent moved most assets into the trust and no probate is opened.

Which Trusts Qualify

A qualified revocable trust is any trust the decedent was treated as owning immediately before death because the decedent held the power to revoke it, under Internal Revenue Code Section 676.⁷ A standard living trust is the typical example.

A decedent can leave more than one QRT, and the fiduciaries can include some or all of them in a single election. When multiple trusts join, the trustees designate one filing trustee for the combined Form 1041 and agree on a reasonable method for allocating tax liability among the trusts.⁵

How to Complete Form 8855

The form is short but pulls information from three sources: the estate (or filing trust), the decedent, and each QRT joining the election.

Part I: Estate or Filing Trust

Enter the name, address, and EIN of the estate, or of the filing trust if no estate exists. Include the executor’s or filing trustee’s name and the date of appointment. One detail catches people off guard: the trustee of a QRT must obtain a new EIN for the trust after the decedent’s death. The EIN used during the decedent’s lifetime does not carry over.⁶

Part II: Decedent Information

Enter the decedent’s full name, Social Security number, and date of death.

Part III: Qualified Revocable Trust Information

For each QRT joining the election, enter the trust’s name, the new post-death EIN, the trustee’s name, and the trust’s address. Information for every joining QRT must be included.⁶

Both the executor (or filing trustee) and the trustee of each electing QRT sign. Keep a copy of the signed form and proof of timely filing.

When and Where to File

Form 8855 is due by the due date, including extensions, of the Form 1041 for the first taxable year of the related estate or filing trust. That deadline applies even if the combined entity would not otherwise be required to file a return.⁶ For a calendar-year estate, that means April 15 of the year following the decedent’s death. For a fiscal-year estate, it is the 15th day of the fourth month after the fiscal year closes.⁸

Form 8855 is not mailed on its own. It is attached to the first Form 1041 filed for the combined entity. The IRS routes filings to one of two service centers based on the fiduciary’s location: Kansas City, MO 64999 for a listed group of Eastern and Midwestern states, and Ogden, UT 84201 for all other states, foreign countries, and U.S. possessions.⁶ Check the current year’s Form 1041 instructions before mailing, since addresses change.

How Long the Election Lasts

The election period starts on the date of death and ends on what the statute calls the “applicable date.” The applicable date depends on whether the estate must file a federal estate tax return (Form 706).¹

If no Form 706 is required, the election ends two years after the date of death.
If Form 706 is required, the election ends six months after the final determination of the estate tax liability. That determination date is the earliest of several events, such as the IRS issuing a closing letter, a court decision becoming final, or a settlement agreement being executed.

Once the period ends, combined treatment stops immediately. The trust can no longer use the estate’s taxpayer identification number, and later income is reported on the trust’s own return.

What Ends When the Election Ends

At termination, the IRS treats the electing trust’s share of assets as having been distributed to a new trust. The trust itself does not dissolve; the deemed distribution is a tax fiction that flips the entity back to separate reporting.

If an executor was appointed, the trustee files future Form 1041 returns under the trust’s existing name and EIN on a calendar year. If no executor was appointed and the trustee served as the deemed executor, the trustee must obtain another new EIN and file under that number going forward.⁵

Two transition points deserve attention well before the applicable date. If the trust holds S corporation stock at termination, a QSST or ESBT election must already be in place, or the corporation’s S status is at risk. And the estimated tax exemption drops away, so the trust becomes responsible for quarterly payments on its own income.

The Election Is Irrevocable

The statute requires the election to be made by the due date of the first Form 1041, including extensions, and once made it cannot be revoked.¹⁹ Missing the deadline forfeits the benefits for the entire period.

Late-election relief generally falls under Treasury Regulation Section 301.9100, which allows the IRS discretion to grant extensions when the taxpayer acted reasonably and in good faith and the government’s interests are not prejudiced. Pursuing that relief requires a private letter ruling request, which carries significant professional fees and no guarantee of approval. Filing on time is the far simpler path.

Because the election locks the fiduciary in for the full period, it is worth modeling the numbers before filing. In most cases the benefits outweigh the drawbacks, but situations exist where separate reporting produces a better overall result, such as when the trust and estate hold losses and income that offset more favorably on separate returns. A tax professional familiar with fiduciary income taxation can compare both scenarios before the deadline.

1
Office of the Law Revision Counsel. 26 USC 645 – Certain Revocable Trusts Treated as Part of Estate
2
Office of the Law Revision Counsel. 26 U.S. Code 6654 – Failure by Individual to Pay Estimated Income Tax
3
eCFR. 26 CFR 1.642(c)-2 – Unlimited Deduction for Amounts Permanently Set Aside
4
Office of the Law Revision Counsel. 26 U.S. Code 469 – Passive Activity Losses and Credits Limited
5
eCFR. 26 CFR 1.645-1 – Election by Certain Revocable Trusts to Be Treated as Part of Estate
6
Internal Revenue Service. Form 8855 (Rev. December 2020)
7
Office of the Law Revision Counsel. 26 U.S. Code 676 – Power to Revoke
8
Internal Revenue Service. Forms 1041 and 1041-A: When to File
9
Internal Revenue Service. About Form 8855, Election to Treat a Qualified Revocable Trust as Part of an Estate