My minor has a master trust from a settlement and also collects survivor benefits. Before the trust I never had to file a return for her. I was told ill recieve a grantor letter, not a K1. How doI go about this? I assume I fime my return, claiming her as a dependant. File a return for the trust itself. Then file a return for her, stating someone claimed her as a dependant? It seems off only becayse its like im reporting the income for the trust twice, once on the trusts return and again on hers? Anyone have some expertise on this one? Thanks in advance!!!
The trust will provide the Grantor letter that will focus on the tax treatment of income earned within a trust and provide details for beneficiaries to report the income on their personal tax returns. You should know what to report when it is received. A trust return may not be required and it would seem the master trust is being handled. Only you can check this information.
If you meet the qualifications to claim your child you will still claim her.
Depending on the amount and type of income you may need to consider information provided here: