1099R with TID of Trust
Our custodian will allow a pass through claim for beneficiaries of a trust by dividng the IRA up per beneficiary BUT they require the TID on each account to be the trust’s and not the individuals SSN.
How will this be reported during the stretch out of the RMD? I am concerned that this requires additional accouting until all the money is distributed.
Thanks.
Permalink Submitted by Alan Spross on Mon, 2012-03-19 19:50
Each IRA account would be titled to the trust if it includes the trusts TIN. Only the trustee of the trust could request distributions and all distributions from each such IRA would be reported to the trust and included in the trust’s 1041 filing. The trust would then pass through the distributions on a K-1 unless the trust provisions allow for accumulating income. At that point the separate accounts only function to serve as an accounting tool to show how much remains for each beneficiary’s share.
Permalink Submitted by Aryn Sands on Mon, 2012-03-19 19:59
The custodian said that they will do individual RMD’s (based on eldest) so it would be more than just accounting??? Anyway, it sounds like you are confirming for me that there is no way to have the beneficiaries put the 1099R on their 1040 directly by assiging the income without doing trust accounting. Ugh…
Permalink Submitted by Alan Spross on Mon, 2012-03-19 20:12
If the trust is allowed to terminate, then the inherited IRAs could be assigned to the individuals and distributions made to the individuals under their SSNs (RMDs still must use the oldest beneficiary). Doing this depends on the IRA custodian’s interpretation of the trust provisions, and they should have been provided a copy as a requirement of the trust being qualified for look through RMD treatment.