Irrevocable trust income

Forum|Forum|9 months ago
September 7, 2025
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My mother in law died July, 2025. She had an irrevocable trust with several CD's that will mature later this year. The bank indicates that they will only issue one 1099-INT under the trust's EIN. I believe that I should file normal 1040 for income (SS,CD interest etc) earned prior to her passing but how is the interest reported after her death. My wife is the trustee & sole beneficiary.

M-MTax

Level 15

@JJPhare wrote:
.....how is the interest reported after her death.

On Form 1041 assuming the interest exceeds the threshold for filing.

See https://www.irs.gov/instructions/i1041#en_US_2024_publink1000285942

JJPhareAuthor

Level 2

My wife seems to think that the interest becomes part of her income since the trust terminated at death of her mother.

If the one 1099 includes interest pre and post death, how can she indicate that part of the interest is hers?

M-MTax

Level 15

How is that shown since the 1099 INT has the entire amount but split on 2 different forms? Can a note of explanation be attached to the return?

You would enter the entire amount on the return for which the 1099 was issued and then indicate that a portion of that amount was received as nominee for the other party.

See https://www.irs.gov/instructions/i1099gi#en_US_2025_publink1000286907