Mom Died with living trust

[Brett-IA]

My mother passed in September and all assets are in a living trust that is now irrevocable. We are attempting to sell all the assets in brokerage account but some have stretched into 2023 (not sold yet). The brokerage firm instructed that we needed to create a EIN to add to my mothers account since her SS is no longer valid.  I've also created another Trust account used to stage and transfer the sold assets / cash to be and the other beneficiary. Also suggested by the brokerage firm. 

That's the history. Here's my questions. 

I have 2 1099-INT forms. One for my mothers trust, and one for my new temporary account. I I have to file a 1040 for my mothers final tax return. I assume that should include all the interest made on my mothers trust. But Im unclear about this 1041 I keep reading about.  Do I have to file a final 1040 and a 1041?

On the 2nd account 1099-INT it has a EIN I created. Cant I simply add that interest to my personal taxes? or do I have to submit a 1041 for that as well?

The last question is next year. These assets will be sold this year (2023). Do I just cover that with a 1041 for my mothers trust?

I know these are simple questions, but frankly its confusing. Thanks for advice in advance. 

[Anonymous_ · Accepted solution]

I am very sorry for your loss.

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@Brett-IA wrote:

Do I have to file a final 1040 and a 1041?

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Yes. Simply put, you would file a final 1040 for your mother which would include the interest up through the date of her passing (9/2022) and then a 1041 for the interest from that date through the end of 2022 (12/31/2022).

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@Brett-IA wrote:

On the 2nd account 1099-INT it has a EIN I created. Cant I simply add that interest to my personal taxes? or do I have to submit a 1041 for that as well?

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For the second trust, assuming it is a grantor trust, you could report using one of the optional methods (see link below) but since you received an EIN, you would generally file a 1041 with a GIS Grantor Information Statement. You would then report the information (income) on your 1040.

https://www.irs.gov/instructions/i1041#en_US_2022_publink1000286018

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@Brett-IA wrote:

The last question is next year. These assets will be sold this year (2023). Do I just cover that with a 1041 for my mothers trust?

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Yes, assuming those assets are still in your mother's trust (i.e., have not been transferred to the second trust).

[Brett-IA]

Thanks @tagteam . Very helpful. 

Brett