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?

[jill3]

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

[qbteachmt]

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/

[jill3]

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

[PhoebeRoberts]

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?

[BobKamman]

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?

[qbteachmt]

The article I linked includes helping you understand what type of trust, matters; what type of beneficiary, matters, for there to be an inherited IRA.

I never replied it isn't allowed. I replied every detail matters.

"Transferred" typically is used to describe from one IRA account to another. If the Trust was the beneficiary on the IRA account, you might be explaining ownership was then to the Trust. And the trust can pass on the IRA account, or have gotten a Distribution (all the money) and passed on the money (which would explain the 1099-R) or the Trust got a 1099-R because the Trust gets the RMD distribution until it gets rid of the account. Code G means Transferred directly. But you also used the word Rollover, which means a distribution and a re-deposit to a new/existing/different account. That would imply the Trust already held an IRA account, perhaps from that same decedent?