TurboTax Business (2016-2022 ...)
Windows 10
trust #1: ILIT
trust #2: Estate Trust (RLT) now irrevocable
my brother & i are the original primary beneficiaries of the Trusts.
began using TT Business for both trusts (RLT & ILIT) when the RLT became irrevocable in 2016. previously, the ILIT 1041 was simple.
completed distribution of ILIT assets in 2022.
planning to complete distribution of RLT assets in 2023.
my brother died in december 2022. his son is now his contingent beneficiary (via "his heirs" clause).
question 1 (ILIT). on final 1041, to be filed this year, should i file with my brother as a beneficiary or my nephew? ILIT has continuing losses from a managed brokerage account. obviously, my brother incurred some of these losses in past years & my nephew for this year, but currently, my nephew is now the contingent beneficiary.
question 2 (RLT). who should i file as beneficiary this year, my brother and/or my nephew? next year, my nephew?
question 3 (RLT). i made a distribution to my brother this year, (it was actually intended to be the income from his portion of the account). Would it be easier for my nephew's filing taxes if i considered this distribution to be tier 2 and kept the income inside the trust this year?
thank you for your time.
I think you meant to say that your brother's son is the successor beneficiary to your brother, not a contingent beneficiary (unless perhaps his son is the contingent successor beneficiary with respect to a deceased primary successor beneficiary). A contingent beneficiary designation only applies if there is no living primary beneficiary.