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If the distributions are made to the estate and the estate passes those distributions through to the beneficiaries of the estate, then the distributions will be taxed to the beneficiaries at their respective income tax rates. The estate would not have to pay income taxes on the distributions. This would be accomplished by filing Form 1041 and giving individual Schedule K-1s to each beneficiary.
The 1041 is to report income and pay income taxes on estate income, not estate taxes. If the income is passed through to the beneficiaries of the estate, then K-1s are given to those beneficiaries who then report the income on their individual tax returns.
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You really don't need to get a private letter ruling (PLR). There are already rules in place, and you can use existing PLRs to cover your situation if the fact pattern is similar enough.
If the trust is written to follow strict IRS guidelines commonly known as "see-through" or "conduit" trust rules, the trust can be beneficiary without any big problems. Although the income-tax rates that trusts pay are generally higher than income taxes paid by individuals, your heirs can avoid paying the high trust rate if the trustee can pass all the IRA distributions out to the individual trust beneficiaries. So you need to be sure that, if the trust is named as beneficiary, and the trustee has the latitude to do this, the IRA distributions won't get trapped inside the trust. The beneficiaries can roll them into their own IRAs. That is assuming that the trust was written by an attorney who knows about trusts and IRAs.
If the trust is the beneficiary and does NOT pass the IRA through to the beneficiaries, the trust would have to draw down the IRA in installments every year over the life expectancy of the oldest trust beneficiary.
If the estate does take the distributions from the IRA, it is income to the estate, but the estate gets a deduction for any distributions that it makes. So if the estate drew down $80,000 from the IRA, but turned around and distributed all of the funds to the beneficiaries of the estate, the estate would get a deduction equal to the amount distributed, in this case $80,000. The estate would have no taxable income, and each beneficiary would be taxed at his or her own tax rate. The problem with this is that the distributions might be significant enough to cause the heirs to pay a higher income tax rate on their personal returns. So careful planning to keep everyone happy is a must!
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I'm sorry that I didn't respond sooner but I did not have access to a PC.
Some people obtain private letter rulings in order to close the estate rather than to have to continue to make distributions to the estate over a long period and then have those distributions passed through to the beneficiaries. However, in your situation this doesn't seem necessary as the remaining life expectancy is short (which will permit you to close the estate sooner) and the amounts being distributed to each beneficiary are relatively small ($32,500 each) which may not push the beneficiaries into higher tax brackets. The distributions could either be made all this year, or a portion this year with the balance next year.