Answers are noted beside each of your questions.
Questions:
1. A 1099 was issued by the bank for interest earned in her SS #. Should I transfer the income received after her death and report via the trust?
- Yes. Any interest after death will be reported on the beneficiary(ies) return via the trust return K1s. See how to nominee below.
2. Is the interest and fees paid in December fully deductible by the trust?
3. The cousin who remained in the house assumed all bills and was responsible for the cleanout and preparing the home for sale. Is there any impact on the trust accounting for this?
- It depends. If the trust pays for any services then they could take the deduction, otherwise there is nothing to report.
4. Do we need to do a calendar year end return for the trust, or can we do just one final return after the house is sold (providing that its less than one year since her death) ?
- Filing requirements for the trust return is gross income of $600. If there was no income in 2024, the return is not required.
The fiduciary (or one of the joint fiduciaries) must file Form 1041 for a domestic estate that has:
- Gross income for the tax year of $600 or more;
- A beneficiary who is a nonresident alien; or
- If you held a qualified investment in a QOF at any time during the year, you must file your return with Form 8997 attached.
- See the Form 8997 instructions.
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