IRS Form 8855 Guide: Section 645 QRT and Estate Election

Introduction: What is IRS Form 8855?

IRS Form 8855, titled Election To Treat a Qualified Revocable Trust as Part of an Estate, is an official tax document governed by the Internal Revenue Service (IRS). It is filed under Section 645 of the Internal Revenue Code by the executor of a decedent’s estate and the trustee of a Qualified Revocable Trust (QRT).

When someone passes away with a revocable living trust, tax rules normally treat the post-death trust and the probate estate as two separate taxable entities, requiring two separate tax returns. Filing Form 8855 allows the trust and estate to combine for federal income tax purposes, enabling the trust to be treated as part of the estate and unlocking significant administrative and tax advantages.

Purpose of the Form

Under standard IRS regulations, trusts are strictly required to use a calendar tax year (ending December 31) and face restrictive income tax rules. Estates, on the other hand, enjoy greater tax flexibility, including the ability to choose a fiscal tax year, take higher personal exemptions, and claim deductions for charitable set-asides.

Form 8855 solves administrative duplication and tax disparities after a grantor’s death. By making a joint Section 645 election on Form 8855, the trustee and executor consolidate tax reporting into a single Form 1041 return under the estate’s Employer Identification Number (EIN), significantly reducing accounting fees and optimizing tax deductions.

Who Needs to File Form 8855?

Form 8855 is filed jointly by fiduciaries administering the affairs of a deceased individual who created a revocable trust. Eligible filers include:

• Executors and Administrators: Court-appointed personal representatives or executors of the decedent’s probate estate.
• Trustees of a Qualified Revocable Trust (QRT): Trustees managing any trust (or portion of a trust) that was treated as owned by the decedent during life under Section 676 because the decedent held the power to revoke it.
• Trustees Acting Without an Executor: If there is no court-appointed executor and no probate estate, the trustee of the QRT can still file Form 8855 to treat the trust as an estate for tax purposes.
• Multiple Electing Trusts: If the decedent created more than one QRT, each trustee can join the executor in making the Section 645 election.

Who Is Exempt / Not Required to File?

You do not need to file Form 8855 under the following circumstances:

• Irrevocable Trusts: Trusts that were already irrevocable before the decedent’s death do not qualify as QRTs and cannot make a Section 645 election.
• Standard Separate Filers: Estates and trusts that choose to file separate standalone Form 1041 tax returns without electing Section 645 treatment.
• Estates Without a Trust: Probate estates where the decedent did not establish a revocable living trust.
• Living Grantors: Form 8855 can only be executed after the death of the grantor; it cannot be used during the grantor’s lifetime.

When to File

Timing is critical when executing Form 8855, as late filings can jeopardize the election:

• Filing Deadline: Form 8855 must be filed on or before the due date (including extensions) of the Form 1041 for the first taxable year of the estate (or the electing trust, if there is no executor).
• Election Period Duration (No Estate Tax Return): If no federal estate tax return (Form 706) is required, the election period lasts for two years starting from the date of the decedent’s death.
• Election Period Duration (Form 706 Required): If Form 706 is required, the election period ends six months after the date of final determination of estate tax liability.
• Irrevocable Decision: Once made, the Section 645 election is completely irrevocable.

Where and How to File

Form 8855 is not filed as a detached standalone document; it must be submitted alongside the initial income tax return.

• Attached to Form 1041: Attach the completed, signed Form 8855 directly to the Form 1041 (U.S. Income Tax Return for Estates and Trusts) filed for the first tax year of the estate (or electing trust).
• Electronic Filing (E-File): If the fiduciary e-files Form 1041, Form 8855 is submitted as an attached PDF schedule within the electronic return package.
• Paper Filing: If mailing a physical Form 1041, attach Form 8855 directly behind the main return and mail to the IRS address as per instructions for fiduciary returns in your region.

Step-by-Step Instructions to Fill Form 8855

Form 8855 consists of decedent information, estate and trustee identification, and required fiduciary signature declarations.

Part I: General Information (Estate & Executor)

• Decedent Information: Enter the decedent’s full legal name, Social Security Number (SSN), and exact date of death.
• Estate Details: Enter the legal name of the estate and its Employer Identification Number (EIN). Check the box indicating whether a court-appointed executor exists.
• Executor Information: Provide the executor’s name, title, mailing address, and telephone number.

Part II: Electing Trust Information & Trustee Details

Complete a separate Part II section for each electing Qualified Revocable Trust:

Field / Item	Required Information	Instructions & Verification Rules
Trust Identification	Trust Name & EIN	Enter the exact legal name of the QRT and its taxpayer identification number.
Trustee Details	Trustee Name & Address	Provide the full name, title, mailing address, and phone number of the acting trustee.
Creation Date	Date Trust Established	Enter the original execution date of the revocable trust agreement.
Revocation Authority	Decedents’ Power Verification	Verify that the decedent retained the legal power to revoke the trust until death.

Parts III & IV: Signatures and Declarations

Under penalties of perjury, both fiduciaries must execute the form:

• Part III (Executor Signature): Signed and dated by the court-appointed executor or administrator.
• Part IV (Trustee Signature): Signed and dated by the trustee of the electing trust.

Required Documents and Information Needed Before Filling

Assemble the following legal and tax records prior to preparing Form 8855:

• Certified Death Certificate: To verify the decedent’s date of death and Social Security Number.
• Original Trust Agreement & Amendments: Documentation proving that the trust was a Qualified Revocable Trust under Section 676 during the grantor’s life.
• Letters Testamentary / Letters of Administration: Court documents proving the official appointment and authority of the executor.
• Employer Identification Numbers (EINs): Official IRS confirmation letters showing the separate EIN of the estate and the EIN of the trust.
• Draft Form 1041: The initial income tax return to which Form 8855 will be attached.

Common Mistakes to Avoid

• Missing the First Form 1041 Deadline: Submitting Form 8855 after the due date (including extensions) of the first Form 1041. The IRS will reject late Section 645 elections unless formal relief is granted.
• Missing Required Signatures: Failing to obtain signatures from both the executor and the trustee. Both parties must sign for the joint election to be valid.
• Electing for Ineligible Irrevocable Trusts: Attempting to make an election for an irrevocable bypass, credit shelter, or life insurance trust that was not fully revocable by the decedent.
• Failing to Obtain an Estate EIN: Using the decedent’s SSN instead of securing a proper estate EIN from the IRS for post-death reporting.

Penalties for Non-Filing or Errors

Failing to file Form 8855 properly does not trigger an automatic flat dollar fine, but it creates significant procedural and tax liabilities:

• Invalidation of Estate Status: The trust is disqualified from Section 645 treatment and forced to file as a standard complex trust on a calendar-year basis.
• Late Filing Penalties: If the trust assumed it had an extended fiscal year under Section 645 but the election was invalid, the IRS will assess failure-to-file and failure-to-pay penalties for missed calendar-year deadlines.
• Loss of Tax Advantages: Disallowance of charitable set-aside deductions, loss of S corporation shareholder eligibility, and forfeiture of the $25,000 active rental real estate loss allowance.

Related Forms and Schedules

• Form 1041: U.S. Income Tax Return for Estates and Trusts (the primary return to which Form 8855 is attached).
• Form 706: United States Estate (and Generation-Skipping Transfer) Tax Return.
• Form SS-4: Application for Employer Identification Number.
• Form 56: Notice Concerning Fiduciary Relationship.
• Schedule K-1 (Form 1041): Beneficiary’s Share of Income, Deductions, and Credits.

Frequently Asked Questions (FAQs)

1. What is a Qualified Revocable Trust (QRT)?

A Qualified Revocable Trust is any trust (or portion of a trust) that was treated as owned by the decedent during life under Section 676 because the decedent held the power to revoke, amend, or terminate the trust.

2. Can a trustee file Form 8855 if there is no probate estate or court-appointed executor?

Yes. If no executor has been appointed and no probate proceeding is open, the trustee of the QRT can execute Form 8855 alone, allowing the trust to be treated as an estate for tax purposes.

3. What is the biggest advantage of making a Section 645 election?

The biggest advantages include adopting a fiscal tax year instead of a calendar year, filing only one combined Form 1041 return instead of two, holding S corporation stock without immediate QSST elections, and claiming charitable set-aside deductions.

4. How long does the Section 645 election last?

If no federal estate tax return (Form 706) is required, the election lasts for two years from the decedent’s date of death. If Form 706 is required, the election period ends six months after the final determination of estate tax liability.

5. Can we cancel or revoke Form 8855 after filing?

No. Under Treasury Regulation § 1.645-1, the Section 645 election made on Form 8855 is completely irrevocable once submitted.

Conclusion: Key Takeaways

IRS Form 8855 is a valuable post-mortem estate planning tool that bridges the gap between probate estates and revocable living trusts. By filing this joint Section 645 election on time with the initial Form 1041, fiduciaries can streamline income tax reporting into a single return, adopt flexible fiscal years, and unlock valuable estate-level deductions. Make sure both the executor and trustee sign the form and file before the first tax return deadline.