What is the Section 645 election for a revocable trust?
Check whether the rules fit your situation, then review the worked example, requirements and records.
Generally available after death; irrevocable once made
Reviewed by Ebot Mbi, CPA, EA · Last reviewed · Law and figures current as of September 17, 2026
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Terms used in this guide
A deduction reduces taxable income; a credit reduces calculated tax; deferral changes when tax is due.
The Internal Revenue Code (IRC) is federal tax law; Treasury regulations explain its rules; IRS publications explain the agency's guidance.
- basis:
- the tax amount used to measure gain, loss or allowable deductions.
In brief
Under IRC §645, the executor, if any, and the trustee of a qualified revocable trust can elect on Form 8855 to treat the trust as part of the decedent's estate for income tax. The estate can then use a fiscal year and file one Form 1041. The election is due by the due date, with extensions, of the estate's first return, is irrevocable, and lasts two years or longer if Form 706 is required.
Key takeaways
- A qualified revocable trust is one treated as owned by the decedent under §676.
- Form 8855 is due by the due date, including extensions, of the first Form 1041 (§645(c)).
- The election period ends two years after death, or six months after the estate tax is finally determined if Form 706 is required.
- The combined estate can use a fiscal year; a trust alone must use a calendar year.
- Estates, and grantor trusts that receive the residue, are exempt from estimated tax for years ending within two years of death (§6654(l)).
What it is
When someone with a funded revocable trust dies, the trust becomes irrevocable and a separate taxpayer. If there is also a probate estate, the family may have two fiduciary income tax returns with different rules. The §645 election combines them for income tax during the election period.
Without the election, the estate and the trust each file Form 1041 with their own tax years and rules, and the trust must use a calendar year under §644. When most assets are in the trust, the probate estate may be small, but it still needs its own return, and the trust loses access to several estate-only provisions.
What the law says
IRC §645(a) provides that if the executor, if any, and the trustee of a qualified revocable trust elect, the trust is treated and taxed as part of the estate for all taxable years of the estate ending after the date of death and before the applicable date. Under §645(b)(2), the applicable date is two years after death if no estate tax return is required, or, if one is required, six months after the final determination of estate tax liability. Under §645(c), the election must be made by the due date, including extensions, of the estate's first income tax return and is irrevocable.
Treas. Reg. §1.645-1 provides the details, including that if there is no executor, the trustee makes the election alone, and how the combined return is filed. Under §6654(l), for taxable years ending before two years after death, estimated tax does not apply to the estate or to a grantor trust that receives the residue of the estate under the will.
Requirements and tests
Only a trust that was a qualified revocable trust at death can be included. More than one qualified revocable trust can join the same election. If an executor is appointed after the election is made without one, the executor must agree to continue it, and the regulations describe how the election then applies.
- The trust was treated as owned by the decedent under §676 because of the decedent's power to revoke.
- The executor, if any, and the trustee both sign Form 8855.
- Form 8855 is filed by the due date, including extensions, of the first Form 1041 for the estate or, if no executor, for the trust.
- The combined entity files one Form 1041 under the estate's name and EIN, with the trust's items included.
How it works
The estate chooses a fiscal year ending on the last day of any month within 12 months of death. The trust's income is reported on the estate's return. The combined entity can use estate-only rules during the election period, such as the §642(c)(2) deduction for amounts permanently set aside for charity and the exemption of $600 instead of the $300 or $100 trust exemption.
It can also defer income by choosing the fiscal year-end.
When the election period ends, the trust becomes a separate taxpayer again and must switch to a calendar year.
Distributions from the combined entity carry out distributable net income to beneficiaries in the usual way, and the separate share rule treats the estate and the trust as separate shares for that purpose. The trustee and executor need to track which share each item belongs to, even though they file one return.
The trust still needs its own employer identification number, and after the election period ends it files its own returns on a calendar-year basis.
Assumptions: Decedent dies March 15, 2026, with a funded revocable trust and a probate estate; no Form 706 is required.; The estate elects a fiscal year ending February 28.; Form 1041 for a fiscal-year estate is due on the 15th day of the fourth month after the year ends.
| First fiscal year | March 15, 2026 – February 28, 2027 |
|---|---|
| First Form 1041 and Form 8855 due (before extensions) | June 15, 2027 |
| Election period ends (two years after death) | March 15, 2028 |
| Returns under the election | One combined Form 1041 per year instead of two |
| Estimated tax for years ending before March 15, 2028 | Not required for the estate |
The election gives the combined entity a fiscal year and one return through the election period, as long as Form 8855 is filed on time.
Illustration only; not a projection of your results.
Risks and IRS scrutiny
Risks include missing the Form 8855 deadline; a late election can be made only if the IRS grants relief under Treas. Reg. §301.9100-3 through a private letter ruling, which carries a user fee and is not assured; disagreement between the executor and the trustee; confusion over which entity pays which tax; and forgetting the switch to a calendar year after the election period. The election is irrevocable, so separate treatment is no longer available if it later turns out to be better.
Who it is not for
This is not for estates without a funded revocable trust, for situations where separate trust treatment serves a purpose (for example, different beneficiaries or a need to keep liabilities separate), or for cases where the executor and trustee cannot agree.
If the estate will be settled within a few months and the trust holds most of the assets, the benefit of combining may be small, but the fiscal-year and estimated-tax benefits still make the election worth reviewing.
How ebotCPA helps
We confirm the trust qualifies, compare combined and separate treatment, choose the fiscal year, prepare Form 8855 and the combined Form 1041, and calendar the end of the election period. We coordinate with your attorney, who drafts the legal documents.
Book a $497 Case Analysis to have Ebot Mbi, CPA, EA review your facts before you act.
Frequently asked questions
When is Form 8855 due?
By the due date, including extensions, of the first Form 1041 for the estate, or for the trust if there is no executor (§645(c)).
How long does the §645 election last?
Until two years after death if no Form 706 is required; if one is required, until six months after the estate tax liability is finally determined.
Can the §645 election be revoked?
No. Once made, it is irrevocable.
Does an estate have to pay estimated tax?
Not for taxable years ending within two years after death. A residuary grantor trust gets the same exemption (§6654(l)).