Inherited IRA from a Trust that only had an IRA in it with 7 other beneficiaries No RMDs for 2024

[calyondano111]

Does anyone have the section of Turbo Tax for entering this information.  I received a K-1 for the IRA distribution.

[dmertz · Accepted solution]

The fact that the income paid to you from the trust came form an IRA has no bearing on how the income is reported on your tax return.  Simply enter the Schedule K-1 (Form 1041) under Wages & Income -> Business Items -> Schedules K-1, Q and TurboTax will place the box 5 amount from the Schedule K-1 on Schedule E Part III.

[calyondano111]

It may be the right answer.  It just seems unfair that it would not be subject to the 10-year rule for distributions instead of instant recognition for the entire balance.

[dmertz]

The 10-year rule determines that minimum amount that the trust is would be required to have distributed each year.  As long as the amount distributed is at least the minimum for the year, the trustee of the trust otherwise controls the amount that is distributed each year.  Whatever amount the trustee of the trust actually requests to be distributed (and is distributed) becomes income to the trust which is distributable to the trust beneficiaries during the trust's income-tax year.

In your case, if the trust was subject to the 10-year rule for 2024 (as a result of the decedent dying after 2019 and before 2024), the trustee could have chosen not to receive a distribution for 2024 and would not be subject to an excess-accumulation penalty.