Trying to figure out if this is a CPA error or normal.
IRA was given to Estate EIN after death. Probate. It was the cashed out and transferred to Trust EIN. Trust was paid out to mostly charitable beneficiaries. CPA told us the plan was to move the income to the trust with a K-1 (done) and then write-off the taxes with the charitable donations deductions.
Now, we have both tax packets. Estate reports 1099-R income and generates a K-1 which has 200k listed as other income in Box 5 and -200k listed on Box 14, with code H. No statements attached other than the 1099-R.
Trust does not reflect this income or the charitable deductions, only the $15k in interest income (1099-INT) and deductions up to that amount.
I have mentioned this several times but she says it was done correctly. It just doesn't seem to match what she said in the initial consultation. Does it sound right to you?? The K-1 income NOT being listed anywhere by the Trust/K-1beneficiary?
She says the income and deduction are both listed on the estate and therefore do not need to be listed on the trust. But the deduction is only the pass-through income from what I can tell, or this Code H whatever it's supposed to mean, since it doesn't seem to have context in this situation (no investments were made).
She says the K-1 is all that is needed. Doesn't the trust still need to report it? And the donations? I am so confused. And she won't explain it to me and is now irritated by my question. My biggest fear is being audited.
If you think she's done this correctly, can you please explain it to me so I can stop irritating her?
If you think she's done it incorrectly, can you please tell me what I should say to her to explain the issue?
Thank you very much.
