topic Interest to A Trust in Business & farm

Interest to A Trust

RGB21 — Mon, 24 Feb 2025 20:19:46 GMT

I know that any interest earned in a personal tax account goes on Schedule B. However, the individual for the personal account has passed, and the 1099-INT received is for the whole year. I know to correct that you issue a 1099-INT from the personal account to the individual's trust to transfer the interest for the period from the time of death to the end of the calendar year. The issued 1099-INT would go on the trust's Schedule B. However, where do I show the 1099-INT on the personal account? It wouldn't be on the personal account's Schedule B. Thank you.

Re: Interest to A Trust

VolvoGirl — Mon, 24 Feb 2025 20:24:46 GMT

Why not on the personal schedule B? Just enter the personal part amount. Or if the 1099 has their ssn on it you enter the whole amount, after you enter the 1099 INT there will be a page - Do any of these uncommon situations apply and pick the first one, I need to adjust the interest reported on my form.

Re: Interest to A Trust

RGB21 — Wed, 26 Feb 2025 17:59:24 GMT

Thank you that works for the interest and dividends. I will still need to generate the 1099s for a paper trail to transfer the interests and dividends from the deceased persons account to their trust. Do you have any thoughts on how to do the same split on mortgage interest? I reviewed the Home Mortgage Interest Worksheet under the uncommon situations and there is not a comparable feature as with the Schedule B.

Re: Interest to A Trust

DaveF1006 — Wed, 26 Feb 2025 22:31:20 GMT

Yes, here is how to enter.

Go to deductions
interest expense
Other interest expenses

What this does is reduce the trust income and then the income gets distributed to each beneficiary. The mortgage interest is not allocated to each beneficiary directly.