Deferred Annuity paid to a trust following my mother's death

[DWer]

My Mother passed away on June 6, 2024.  She had a deferred non-qualified annuity which was paid in a lump sum to her trust with her Trust's EIN#.  I received a 1099-R which shows the gross distribution amount, taxable distribution amount, federal tax withheld and state tax withheld.  I don't see how I report this in Turbo Tax or on the trust tax return (Form 1041).  Do I enter the taxable amount as Other Income?  Where do I enter the federal and state withholding.  The distribution should be reported on K-1s for my sister and I (50% each).

[dmertz · Accepted solution]

The taxable amount is to be reported on Form 1041 line 8 as Other Income.  If passed through to trust beneficiaries, this Distributable Net Income is reported in box 5 Other Portfolio and Nonbusiness Income, on the beneficiaries' Schedule K-1.

Federal tax withholding goes on Form 1041 line 14.  The tax withholding cannot be passed through to trust beneficiaries.  Any refund is payable to the trust.