In my profession, I am constantly being challenged with the question, “Does a Land Trust have to file a tax return?”

There are many attorneys, accountants, and other professionals who often have it wrong. They are telling me (and their clients) that putting property into a Land Trust requires the Trust to file a tax return with the IRS.

The problem is that most professionals are used to other kinds of trusts. There are many other kinds of trusts that are required to file a tax return. This is not the case for the Illinois-Type Land Trust.

Take note that not all Land Trusts ARE Illinois Land Trusts. It’s just that they are like an Illinois Land Trust. Nonetheless, no matter in which state you form your Land Trust, a Federal tax return is NOT required.

For any/all skeptics out there, here is information about the relevant ruling from the IRS: Revenue Ruling 92-105.

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