Yes, this nominee procedure is optional, but we need to talk about what kind of trust this is before you decide how to report this. Here are some additional considerations that may need to be made. These considerations are made according to how the trust is structured.
- If the trust is irrevocable, the trust needs to file a 1041 trust return and issue a Schedule K-1 to each beneficiary.
- If the trust is revocable and has been treated as part of the deceased parents' estate, the income may be reported directly by the beneficiary.
- There is a nominee procedure that allows the beneficiary to report the income on their personal return, but it requires filing additional forms as DianeW777 explains.
So to elaborate on your question, if the trust is revocable, you may report this income on your own return or use the nominee procedure as DianeW777 mentions.
@talkingpapaya
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
