Trust Applications for IRS Section 42 Disposition Bond

Instructions

A Trust Application should be completed if your Section 42 property ownership is through a Trust. The Trust can be the direct owner of the property or it can be an investor in a partnership that owns the property.

TYPE OF TRUST
There are two types of Trusts that could own Section 42 property: Revocable Trust or Irrevocable Trust. Determine the type of Trust from the descriptions listed below and click-on the appropriate application.

REVOCABLE TRUST
A Revocable Trust is a Trust where Grantor(s) place all the assets in the Trust and personally utilize any tax credit that the Trust receives. The Trust is revocable at any time and the Trust's taxes are filed under Grantor's social security number. Variations of revocable trusts are sometimes called "Grantor's Trust" or "Living Trust." It is very common for the "Grantor(s)" to also be the "Trustee(s)" of the Trust.

IRREVOCABLE TRUST
An Irrevocable Trust is a Trust where Grantor(s) irrevocably place assets into a Trust for the future benefit of other parties. Once the assets are placed in the Trust, they are no longer the Grantor's assets and cannot be retrieved by the Grantor. Trust tax credits are either used by the Trust itself or by the trust's beneficiaries.

If you are unsure of the type of Trust or would like help in completing the application, please contact:

Jack Walsh
Senior Vice President
jwalsh@csdz.com
(800) 996-2550 or (608) 242-2550