IRA rolled over to trust was then passed on to beneficiary as inherited IRA (non-taxable). 1099-R was issued to trust (code G). Do I need to "distribute" IRA from 1041?

Forum|Forum|4 years ago
February 8, 2022
5 replies
25 views

Rolled over IRA showing up as net accounting income on statement but nowhere on form 1041.

ProConnect Tax

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qbteachmt

Level 15

The -R issued to the trust because of RMD? You call it "rolled over" but rolled over to what? Are you sure it wasn't Distributed into the Trust, and no longer exists? The type of trust matters, as do trust beneficiaries. I like to use references written for the consumer, along with IRS resources. I really like investopedia:

https://www.investopedia.com/retirement/designating-trust-as-retirement-beneficiary/

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J

jill3Author

Level 2

Thanks for replying. The IRA was transferred to the trust (i.e. rolled over), then transferred to the trust beneficiary. This is allowable. Natalie Choate addresses this here: https://www.morningstar.com/articles/1026541/can-a-trust-transfer-an-ira-to-a-trust-beneficiary

BobKamman

Level 15

Vocabulary here is important. "Transfer" and "rollover" and "distribution" are not the same. Maybe it was rolled over to the trust's IRA. (Can a trust have an inherited IRA? My clients usually work hard to avoid that.) Maybe it was then rolled over to the beneficiary's inherited IRA. Did the beneficiary receive a 1099-R, and what does it show?

PhoebeRoberts

Intuit Community Champion

Ah, the question is "does DNI attach to the IRA transfer"? Without looking it up, my assumption would be yes, but you know what happens to U and Mption.

Are there multiple beneficiaries, or limited other distributions, such that the answer would change anyone's K-1?

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