Trust received back Social Security

As trustee of my sister who passed in Nov. 2021, I was able to finally receive back paid Social Security of almost $63,000 in 2024. The Trust already has distributed its assets and is planning on filing the final 1041 to close the trust. Now I need advice on how to best report the Form SSA-1099 benefits. If I list it as "Other Income" on the 1041, the income seems to be passed on to the 2 beneficiaries through the K-1. This seems to mean that each beneficiary will need to pay taxes in their own 1040's? Hope someone knows a better way to handle this situation?

1820

Level 15

Mar 17, 2025 4:33:46 PM

Since this trust is intending to terminate and because the tax rate would likely be much higher if not passed through to beneficiaries on Schedules K-1, it would seem sensible to pass this income through to the trust beneficiaries. If this taxable income is passed through to the trust beneficiaries, the trust beneficiaries will be responsible for reporting this income on their individual tax returns for the year that contains the end date of the trust income tax year in which the income was received.

Why sign in to the Community?

Trust received back Social Security