topic Trust Accounts in Get your taxes done using TurboTax

Trust Accounts

sfstevo — Tue, 10 Mar 2026 06:55:47 GMT

I have a few questions about the proper reporting of taxes for an inherited trust account to be divided by the trust agreement amongst four beneficiaries. Some background: my partner passed away in May of 2022. Because the two accounts were not properly titled in the trust name, the two financial institutions (Wells Fargo & E*Trade) have requested a court order to move assets into a trust before we can gain access to assets. There is a trust document in place stipulating how the assets should be distributed upon death. I am the sole trustee of the trust. We have hired a law firm to complete the court order process, which has been filed in this jurisdiction. Once a court order is issued, the two financial institutions will transfer assets to trust accounts. It's straight-forward, no real estate, just a combination of equities and cash.

1) Is the "trust" under the IRS EIN, which we received, responsible for taxes on capital gains, as well as interest and dividend income generated by accounts?

2) Can the proceeds be distributed to beneficiaries without them paying taxes on the inheritance if a 1041 is filed for 2023 in the name of the trust?

3) If we sell investments, the date of death in 2022 be the basis for capital gains?

4) Can Turbo Tax help me file? Or do I need an accountant?

Re: Trust Accounts

JohnS_CPA — Wed, 16 Nov 2022 21:42:33 GMT

Estates and trusts can be very complicated. Emotions are high and things can get out of hand when money is involved. I trust (no pun intended) your situation is one where everyone is amicable.

I'm sorry for your loss. As trustee you take on a great deal of responsibility and potential liability. You have done the right thing by having an attorney helping you through this process. Because your situation involves a trust and will many of the answers to your questions are contained in those documents. It is beyond the scope of this forum to provide answers that may apply to your situation.

You should absolutely have a CPA or tax attorney help you with preparing and filing returns. They will have know what the documents allow and how to best apply the tax law to your situation. You need someone to do the tax work in order to limit your liability. If you don't know a CPA, your trust attorney should be able to make a recommendation.

I wish you the best. Being named trustee is a great responsibility. Don't assume anything and have patience! The legal system runs at it's own pace. In many cases that pace is slower than we think is reasonable.

Re: Trust Accounts

sfstevo — Thu, 17 Nov 2022 00:24:17 GMT

Thanks JohnS, I realized this was over my head when the probate court asked me to file a petition aka known as a Heggstad Petition. The attorney was very competent and is well versed in estate practice beyond my competency, so I'm on the right track. I'll follow thru with a CPA to handle the tax end of the trust. Again thank you for your honest advice.