As you may know, in a revocable living trust, the grantor (the person(s) who creates the trust) retains control over the trust assets and can revoke the trust at any time. Because the trust is revocable, it is considered a disregarded entity for tax purposes, which means that any income earned by the trust is reported on the grantor’s individual income tax return, and not on a trust return.
Thus, at the end of the tax year, you would report any interest income received from the trust bank account on your (the grantor’s) individual income tax return as interest income. The trust does not report the interest income, which would flow to your personal income tax return as the grantor.
I hope this is helpful.
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