Rollover IRA moved to Inherited IRA Trust after owner's death

[okNOW]

What is the name of your state? MA

I am doing income taxes for my widowed motherinlaw who's husband died in 10/2017. Shortly after his death, his rollover IRA was moved into a Trust in his name and became an inherited IRA. My motherinlaw took $56K in distributions in 2018 and received a 1099R form. The 1099-R shows the recepient as the Trust and beneficiary as the deceased name. Do i need to file a separate income tax as the trust using form 1041? Does the 1099R info (box 1 and 2a) get put into my motherinlaw's personal incometax as well? Or does it remain separate under form 1041?

 

[LdiJ]

What is the name of your state? MA

I am doing income taxes for my widowed motherinlaw who's husband died in 10/2017. Shortly after his death, his rollover IRA was moved into a Trust in his name and became an inherited IRA. My motherinlaw took $56K in distributions in 2018 and received a 1099R form. The 1099-R shows the recepient as the Trust and beneficiary as the deceased name. Do i need to file a separate income tax as the trust using form 1041? Does the 1099R info (box 1 and 2a) get put into my motherinlaw's personal incometax as well? Or does it remain separate under form 1041?

What you need to accept, is that you really are not equipped to do your mother in laws taxes this year. She really needs a tax professional. A tax professional ought to have been involved before that IRA ended up in the trust as well, because that could end up costly, tax wise. Your mother in law should have been the beneficiary of the IRA, not the trust. It should have been rolled over into her name, not the trust's.

Tax rates for trusts are seriously higher than tax rates for individuals. You need a tax professional to see if its possible to pass that income from the trust to your mother in law via the trust and a Schedule K-1 (it may or may not be depending on how the trust is worded).