A Section 645 election allows a revocable trust to be treated as part of the estate for federal income tax purposes, simplifying reporting and consolidating filings. This flexibility can help families manage taxes more efficiently, reduce costs, and navigate estate administration with less stress. In a weak economy or declining market, knowing when and how to use a Section 645 election can keep the estate compliant while providing strategic advantages. WHAT IS A SECTION 645 ELECTION? A Section 645 election lets a qualified revocable trust (QRT) be treated as part of the estate. To qualify, the trust must have been fully revocable by the decedent up until death. If it required outside approval to make changes or revoke it, then it does not count as a QRT. Executors and trustees work together to make the election by filing Form 8855, and once it’s made, the choice cannot be undone. THE TAX BENEFITS A Section 645 election offers families and business owners valuable tax flexibility by allowing a trust to be treated as part of the estate. This consolidates income reporting into one return, cutting costs and reducing errors. It also lets the trust use the estate’s fiscal year instead of a fixed calendar year, helping shift income and deductions to the most favorable period. Additional benefits include broader deductions for charitable gifts, a temporary break from estimated tax payments, and waived participation rules for certain income. In short, a Section 645 election simplifies administration, increases flexibility, and can lower overall taxes, an important advantage for families managing assets in uncertain times. WHEN DOES A SECTION 645 ELECTION MAKE SENSE? The decision to make a Section 645 election depends on the details of the estate, the type of assets involved, and the goals of the beneficiaries. Situations where the election often makes sense include: • Multiple trusts tied to the same estate: Combining them under one return reduces complexity. • Ownership of S corporation stock: The election lets the trust remain a qualified shareholder without extra filings. • Significant charitable intent: Deducting amounts set aside for charities can provide meaningful tax advantages. • Desire for fiscal year planning: When income can be shifted across different tax years, beneficiaries may realize considerable savings. A TAILORED APPROACH TO YOUR ESTATE AND YOUR TAX STRATEGY Section 645 elections can save costs but aren’t right for every estate. Dahl Law Group helps families and business owners decide if this strategy fits their trusts, protecting assets and reducing expenses. Contact us for tailored guidance today. Section 645 Elections Combining Trusts and Estates for Efficiency
Did You Know? Did you know that, according to the National Retail Federation, Americans spend over $900 on Christmas every year, with 71% of their holiday budgets allocated to gift purchases? It’s true! And when it comes to Christmas trees, roughly 25–30 million real trees are sold in the U.S. alone, and over 350 million Christmas cards are sent each holiday season.
Here’s a surprising one: The classic Christmas song, “Jingle Bells,” was originally written for Thanksgiving!
And even Santa has numbers: He supposedly delivers gifts to about 2 billion children worldwide … no wonder he needs a whole night (and a lot of cookies!) to get it done.
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