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RON Y
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1099 R in turbo tax business

I am using Turbo Tax Business to do a return for an estate in a trust.  I have multiple people who have done RMD's and I have mulptple 1099 R's with different amounts, some have withholdings.  I can get the amounts paid in, but how do I get withholdings allocated to the correct person

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1 Reply
dmertz
Level 15

1099 R in turbo tax business

"how do I get withholdings allocated to the correct person"

 

You can't because it's not allowed.  Except for backup withholding (IRS mandated withholding, which this withholding is not), is not permitted to be allocated to estate or trust beneficiaries on Schedules K-1 (Form 1041).  The estate or trust must remain open to receive the tax refund and then distribute the refund to the estate or trust beneficiaries.  For this reason, when the taxable income is going to be passed through to estate or trust beneficiaries, having taxes withheld from retirement distributions paid to the estate or trust is ill advised (and is not required).  See the Caution on the IRS instructions for line 14 of Form 1041:

https://www.irs.gov/pub/irs-pdf/i1041.pdf

 

The beneficiaries themselves were responsible for making any estimated tax payments or increasing tax withholding from other sources that might be needed to avoid underpayment of taxes when the income from the estate or trust is taken into account on their individual tax returns.

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