My father passed away in early 2019. He had an IRA account and listed his living trust as the beneficiary.
The custodian, Fifth Third Bank, told me (Trustee) that the taxes on any withdrawals from the IRA had to be taxed through the trust. I made the RMD for 2019 and withheld an amount adequate to cover the taxes.
I was able to figure out how to enter the 1099 R thanks to the post on this site.
I also had to enter a 1099 int, a 1099 div and a 1099 B.
The total distribution which was primarily principal, was substantially larger than the total income.
Before I enter the distribution, Turbo tax figures the tax as 100 % paid by the trust.
After I enter the distribution, Turbo tax puts all the the tax liabilities on the K1,s (there are 5 beneficiaries)
According to Fifth Third bank, the taxes on the IRA portion is 100 % the paid by the Trust and the rest of the income/loss is the responsibility of the beneficiaries and reported to them on a K1.
Is there any way to handle this in turbo tax?
If a distribution is made to the beneficiaries the income is the responsibility of the beneficiaries.
I agree. There were distributions made to the beneficiaries, however the RMD from the IRA was taken late in mid December and that money was not distributed, because I was told it had to be taxed to the trust.
Is it possible to distinguish income from different sources or for that matter income from principal in turbo tax?