topic Death, Trusts and Taxed income... who and what and timing of it all? in Investors & landlords

Death, Trusts and Taxed income... who and what and timing of it all?

klma — Fri, 18 Sep 2020 23:35:11 GMT

My father had a revocable trust. He passed away on Aug. 27. His brokerage account paid out some dividends on Aug. 30. As of today, Sept 18, I have not notified the brokerage firm, but it's on my "to do" list.

I know that my next step is to request an EIN for a new irrevocable trust. While the accounts are still in my Dad's Revocable trust does that income just get reported on his taxes? And then when I establish the new trust and transfer everything into it that all goes on the new trust's 1041? In other words, do all dividends, income after death go towards the new irrevocable trust EIN even if things haven't been moved into that trust yet? Or does income continue to go on my Dad's tax return until I get things transferred?

Along those same lines... my Dad had CD's that were payable on death to me... so not part of the trust. Until such time that I close or transfer those accounts, does all interest income still go on my Dad's taxes, or does any income after his death automatically go on my tax return? I would guess that since it is still under his social security # that it would go on his taxes until I close the accounts.

Thanks for your help!

Re: Death, Trusts and Taxed income... who and what and timing of it all?

Critter-3 — Fri, 18 Sep 2020 23:41:59 GMT

First contact the broker/banks asap and get the EIN from the IRS ... it can be done online and it is free. Then all income UP TO the date of death belongs on dad's final 2020 return. All income from the date of death forward goes on the trust return. Same goes for the CDs ... contact the administrator to alert them of the change of ownership.

I suggest that you read IRS Pub 559 (Survivors, Executors, and Administrators) for guidance.
https://www.irs.gov/pub/irs-pdf/p559.pdf

How to efile for a person who is deceased
https://ttlc.intuit.com/questions/1899441-can-i-e-file-a-tax-return-for-someone-who-is-deceased

You might need form 1310 to claim a refund for a deceased taxpayer
https://ttlc.intuit.com/questions/1899320-form-1310-statement-of-person-claiming-refund-due-a-deceased-taxpayer

Re: Death, Trusts and Taxed income... who and what and timing of it all?

Carl — Sat, 19 Sep 2020 13:53:57 GMT

Here's an additional link to get the EIN. Takes you 10 minutes and is absolutely free.

https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online