My father passed away last year and I am the Successor Trustee for his estate/Living Trust.
I created an Administrative Trust to gather their assets and then distributed assets to a Family/Bypass Trust and Survivor Trust (both with my mother as beneficiary). I am in the process of completing the 1040 tax return and the 1041 returns for the Administrative and Family/Bypass trusts. The Survivor Trust reports under my mother's SS so that can go on their joint return.
After his death, sales of stock were made in a managed account and reported in a 1099-B under his social security number. He also received 1099-DIv and 1099-INT proceeds that were reported under his social security number after his death. Because the income of all trusts goes to my mother, I did not bother to make a nominee distribution on the 1099-DIV and 1099-INT. However I need to make a nominee distribution on the 1099-B sales that occurred after my father's death because 1/2 of these belong in the Family/Bypass Trust.
In the 1040 joint tax return, I adjusted the gain/loss to 1/2 the values, and on the 1041 I entered a 1099-B titled Nominee Distribution from My Father (deceased) listing his SS number and account from which the sales took place.
Is this the correct method to transfer these capital losses to the Family/Bypass Trust? If not what should I do instead?
Thank you,
Paul
