Coronavirus-related IRA Distribution Repaid by Trust (Not an Individual) - Is that allowed for trusts?

[Ephesians3-14]

My client is a trust that received a $20,000 IRA distribution in 2020 (been receiving their IRA distribution as a beneficiary since 2009).

I filed the 2020 trust tax return two months ago. Now, the financial advisor tells me that the trust repaid/returned the IRA distribution to the custodian in 2020 in accordance with the coronavirus relief rules and is requesting that I amend the 2020 trust return to remove the IRA income. (Yes, the distribution qualifies as coronavirus-related distribution.)

Is that allowed? Was a trust allowed to send a coronavirus-related IRA distribution back to the custodian or was that only permitted to be done by individuals?

[qbteachmt]

Here's the part I find confusing: You don't just "receive" a distribution. Someone requests a distribution (typically, the account owner) or an Event triggered a distribution (the death of the account owner) to the Beneficiary, which would be the trust.

Are you sure this trust is the Owner of that IRA account, and it is taking distributions?

Have you read Form 8915-E instructions to see if, once you understand the relationship of Trust to Account, what does and does not qualify under "covid disaster distribution" and what does and does not qualify to be repaid under that provision:

https://www.irs.gov/pub/irs-pdf/i8915e.pdf

[Just-Lisa-Now-]

Someone makes their trust the beneficiary of the IRA, then when they die the bank pays it out to the trust.

I have no clue if repayment is allowed by a trust though.

[qbteachmt]

You cannot Repay an IRA to an account that no longer exists. That's why you have to figure out what is going on here. Perhaps the inherited IRA went to a beneficiary and this is their trust, and all of their income goes here? We don't know.

[Ephesians3-14]

Yes, it qualifies as a corona virus-related distribution. 

Of course the trust the beneficiary of the IRA. Wouldn't make sense to report the distribution on the 1041 if it wasn't.  😉

[Ephesians3-14]

"Perhaps the inherited IRA went to a beneficiary and this is their trust, and all of their income goes here?"

"to an account that no longer exists"

You're reading way too much into a simple question. No one said an account doesn't exist. The trust is was the beneficiary when the old man died and has been the recipient of the IRA distribution (see the original post) for over 10 years. 

Now, back to my simple question: Can a trust (just like an individual) repay a corona virus-related IRA distribution. (BTW..."I don't know" IS an acceptable answer...just like Lisa responded. If you don't know, that's OK. I don't know either.)

[qbteachmt]

"Yes, it qualifies as a corona virus-related distribution"

How can a Trust be subject to a disease? "Coronavirus-related distributions. A coronavirus-related distribution is a retirement plan distribution that was made:1.In 2020 before December 31, 2020; and 2.To a qualified individual. See Qualified individuals next for details"

Read the Qualified Individual statements as listed in the Form 8915-E instructions:

https://www.irs.gov/pub/irs-pdf/i8915e.pdf

"You're reading way too much into a simple question."

It's not simple; if it was simple, you would not have had reason to ask. Let's keep going.

"Yes the trust is the beneficiary and the recipient of the IRA distribution (see the original post) - that's what has been going on for over 10 years ."

Then this is not a covid distribution? It's been routine and ongoing.

"Now, back to my simple question: Can a trust (just like an individual) repay a corona virus-related IRA distribution."

Did you read the Form 8915-E instructions:

"Exceptions. You cannot repay the following types of distributions.1.Qualified 2020 disaster distributions received as a beneficiary (other than a surviving spouse).2.Required minimum distributions.3.Any distribution (other than from an IRA) that is one of a series of substantially equal periodic payments made (at least annually) for: a.A period of 10 years or more, b.Your life or life expectancy, or c.The joint lives or joint life expectancies of you and your beneficiary."

That form's instructions would be the place to start.