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Filing 1041 for a Trust

LoriAnn1 — Fri, 21 Feb 2020 14:19:07 GMT

I received 2019 Forms 1099-INT and 1099-DIV for an inherited living trust that was closed out in July 2019. The interest income is $3 and the dividend is $78. The decedent's entire estate has been closed out and distributed. Final tax filings for the estate were completed in 2018. This account of the estate is the only entity that wasn't closed out in 2018. Do I need to file a 1041 for this 2019 income? Or is $81 unearned income below the $600 gross income threshold?

Re: Filing 1041 for a Trust

Anonymous_ — Fri, 21 Feb 2020 16:21:02 GMT

@LoriAnn1 wrote:

Or is $81 unearned income below the $600 gross income threshold?

Yes, that is well below the filing threshold for an estate.

If you want to tie up all looses ends, however, you could simply prepare a 1041 manually entering the interest and dividend income and marking the return as "final". Even without an income distribution deduction, the exemption will easily cover the $81 in income.

Re: Filing 1041 for a Trust

LoriAnn1 — Fri, 21 Feb 2020 21:23:44 GMT

Thanks so much for your reply! The 1041 filed in 2018 for the Trust was marked final, so I am assuming I shouldn't file another final 1041. So to be clear, the fact that $81 is less than the $300 exemption, the trust would in effect have no taxable income. Therefore no 1041 needs to be filed, no income distributions are required, and the beneficiaries owe no tax on these earnings. Is this correct? Thanks!!

Re: Filing 1041 for a Trust

aldan — Wed, 03 Mar 2021 21:53:39 GMT

i get a 1099-R for myself from a Life Insurance company, and i get one for a Trust set up by my Mother several years ago before her passing. both have my name and ssn on them. they go into 2 separate bank accounts. can i file them separately, or do i have to file the Trust income as part of my personal income?

Can I file a Trust separately or with my personal return?

aldan — Wed, 03 Mar 2021 21:59:11 GMT

Re: Can I file a Trust separately or with my personal return?

ToddL99 — Wed, 03 Mar 2021 22:20:27 GMT

If both have your name and SSN, then both are reported on your tax return.

The trust income is your income - it's just coming from a trust that "passes" it along to you to spend and pay taxes on.

If you received a 1099-R from the trust, it gets entered in the same interview as the 1099-R you received from the life insurance company. See Where do I enter my 1099-R? for instructions on how to enter a 1099-R.

Typically, however, trust income would get reported to you on a Schedule K-1 - not a 1099-R.

Schedule K-1s are reported in the Schedule K-1 interview of Business Investment and EstateTrust Income.

See Where do I enter a K-1 that I received? for instructions on how to enter a K-1.