Single Member LLC received 1099 from brokerage and is owned by a Trust

[ivancillo]

I have a trust that owns a single member LLC. The single member LLC is an investment portfolio so brokerage has issued corresponding 1099.

Does someone know the proper way to enter 1099s under the trust return?

Thanks,

Ivan

[Anonymous_ · Accepted solution]

If the single-member LLC has not made an election to be treated as a corporation for federal income tax purposes and the trust is a grantor trust, then both are disregarded for federal income tax purposes and you can use one of the optional methods of reporting without the need to file a Form 1041.

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

If you are filing a 1041, regardless, then the income is simply reported on the 1041 since the single-member LLC is disregarded for federal income tax purposes (i.e., the income/gain is reported as if received directly by the trust).

[ivancillo]

Thanks for clarifying this. My trust must file separately. In the income and where 1099s are entered, is there a way to include the EIN so the IRS associates the interest and dividend income to this trust or do I just declare income as if it was under the trust's EIN and if further down the road IRS requires clarification then provide paperwork?

Thanks.

[Anonymous_]

Exactly right; simply retain all statements for your records if/when the IRS ever requests same.