My father who passed away has a Trust and I am the Trustee. The Trust inherited his IRA and the custodian, Charles Schwab, is setting up 3 Inherited IRA accounts, 1 account for my father’s main Trust and 2 accounts for the Beneficiaries which my father’s lawyer created Sub Trusts for. His lawyer obtained Tax ID’s for all 3 accounts. The Schwab Estate Specialist said that Schwab will put the inherited money in the main Trust account and I can transfer the funds to the Sub Trusts per the Trust document. For example I will be transferring money from “The John Smith Trust” to “The Jane Doe Trust established by The John Smith Trust”. Is the IRS usually notified of such a transfer and will there be any tax implications? I just want to make sure that the money doesn’t get inadvertently taxed.
