Inherited IRA was moved to a trust and then to the beneficiaries. 1099-R shows Estate as recipient of IRA. How do I report the distribution to the beneficiaries?
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New Member

Inherited IRA was moved to a trust and then to the beneficiaries. 1099-R shows Estate as recipient of IRA. How do I report the distribution to the beneficiaries?

Distribution of IRA assets to Trust and then distributions to beneficiaries both occurred in 2017.  Total distribution to beneficiaries in 2017 included bulk of Trust assets (inheritance) and all of IRA assets.

4 Replies
Level 15

Inherited IRA was moved to a trust and then to the beneficiaries. 1099-R shows Estate as recipient of IRA. How do I report the distribution to the beneficiaries?

Why would an inherited IRA for the benefit of a trust be distributed to the decedent's estate?  It seems to make no sense that the decedent's estate would be the beneficiary of a trust.  The point of a trust is generally to keep assets out of the estate of the deceased.

Was the beneficiary of the IRA actually the estate of the deceased and not a trust?  Unless the decedent's estate was the beneficiary of the IRA, perhaps by default, it seems that there should have been no distribution made from the IRA to the estate.
Level 15

Inherited IRA was moved to a trust and then to the beneficiaries. 1099-R shows Estate as recipient of IRA. How do I report the distribution to the beneficiaries?

If a distribution was actually made to the estate of the deceased, this income to the estate must be reported on and estate income tax return, Form 1041, and the distributions made to the estate beneficiaries reported on Schedules K-1 (Form 1041).
New Member

Inherited IRA was moved to a trust and then to the beneficiaries. 1099-R shows Estate as recipient of IRA. How do I report the distribution to the beneficiaries?

I'm not sure the K-1 is for the distribution of the entire IRA balance to the beneficiaries. Wouldn't you report the distribution as an other deduction thus zeroing out the trust income? The 1099-R's would be prepared by the trust.

 

The 1099-R, which reports the inherited IRA distributions to the IRS, will be generated under the trust name and trust tax identification number.

Level 15

Inherited IRA was moved to a trust and then to the beneficiaries. 1099-R shows Estate as recipient of IRA. How do I report the distribution to the beneficiaries?

In this old original question, the fact that a Form 1099-R was issued to the trust suggests that a distribution was paid to the trust from the inherited IRA and has nothing to do with assigning the inherited IRA out of the trust to the trust beneficiaries.   Assigning an inherited IRA out of the trust to trust beneficiaries is not a distribution from the IRA and is not reportable on either a Form 1099-R or on any part of an estate income tax return.

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